U.S. LNG exports set a record in December

U.S. exports of liquefied natural gas set a new record in December, averaging 9.8 billion cubic feet per day.

The results in December were more than three times higher than the reduced export levels of last summer.

Citing Bloomberg Finance’s shipping data, the U.S. Energy Information Administration (EIA) estimated that a new record was set, after a record-breaking November 2020.

Several factors have contributed to such results in recent months, including increased LNG demand due to colder winter in key Asian markets. Also, supplies of LNG decreased because of unplanned outages at LNG export facilities in Australia, Malaysia, Qatar, Norway, Nigeria, and Trinidad and Tobago. This led to higher prices in Asia and Europe, attracting higher volumes of flexible LNG supplies from the United States.

From April to July 2020, natural gas and LNG prices in Asia and Europe have declined to all-time lows. Prices began to recover in August, and by December, prices have more than quadrupled compared to the low levels of the summer. Higher global prices and reduced exports under term contracts resulted in higher export volumes of flexible LNG, especially from the United States. Since June 2020, more than 50 per cent of U.S. LNG exports went to countries in Asia, about 30 per cent to countries in Europe, and the remaining volumes to countries in the Middle East, Africa, and Latin America, according to the U.S. Department of Energy’s LNG Reports and EIA’s data for November 2020.

EIA expects U.S. LNG exports to remain at record-high levels this winter. In the December 2020 Short Term Energy Outlook (STEO), EIA forecasts that U.S. LNG exports will average 9.5 Bcf/d in the first quarter of 2021 and 8.5 Bcf/d on an annual basis this year, a 30% increase from 2020.