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Released March 01, 2023 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The operators of the Freeport LNG facility in Texas have asked federal regulators for approval to resume further operations necessary to bring the plant to its full capacity, helping to further establish U.S. market supremacy and ease supply-side concerns.
Freeport can receive up to 2 billion cubic feet (Bcf/d) of natural gas primarily taken from the inland shale basins in the United States. Data from S&P Global (New York, New York) finds the terminal was scheduled to receive about 743 million cubic feet of gas on Monday.
During the seven-day period ending February 22, deliveries of natural gas to U.S. liquefied natural gas (LNG) export terminals increased by 1% from the previous period to average 13.1 Bcf/d. There were 22 vessels laden with LNG during that period carrying a combined 82 billion cubic feet (Bcf) of gas in liquid form.
One of those vessels left Freeport, which is slowly recovering from a June pipeline explosion that idled the plant for the better part of six months. Much was made earlier this month when the Kmarin Diamond took cargo from LNG, the first since June.
The company in January filed a notice with the Federal Energy Regulatory Commission to start sending LNG into the facility's piping system. It filed another request Monday, saying it was ready to bring Train 1 back into service.
Train 2 is continuing through restart activities and Train 3 has already resumed normal operations. Freeport's return signals a momentous moment not only for U.S. exports but for energy security in general.
Consultant group Wood Mackenzie (Edinburgh, Scotland) said the war in Ukraine in part was a catalyst for interest in long-term LNG contracts for the United States, which taking some of Russia's market share lost to sanctions.
"Record-high prices and the need for energy security drove buyers, which included portfolio players and U.S. producers and infrastructure companies, to seek long-term U.S. LNG deals in 2022 and created huge contracting momentum for projects," said Giles Farrer, head of gas and LNG asset research for Wood Mackenzie.
The United States was the third-largest LNG exporter last year, but Wood Mackenzie expects that--with support from Freeport--U.S. LNG exports will increase by 16% this year. If its forecast is accurate, the United States this year becomes the world's largest exporter of super-cooled gas.
"However, it won't stop there," Wood Mackenzie's report read. The consultant group believes U.S. LNG exports could expand and possibly double in volume by the end of the decade.
Natural gas seems to have overtaken crude oil as a globally essential commodity, particularly with the loss of Russian supplies in the Western market. That sentiment was expressed in an annual outlook from gas-rich Shell plc (NYSE:SHEL) (London, England), which found the British and European economies took in 60% more LNG last year than they did in 2021.
"The war in Ukraine has had far-reaching impacts on energy security around the world and caused structural shifts in the market that are likely to impact the global LNG industry over the long term," said Steve Hill, Shell's executive vice president for energy marketing. For more on the Shell report, see February 27, 2023, article - Shell Sees Large and Growing Gap Between LNG Demand, Supply by 2030.
The gas race in the years leading up to the war centered largely on pipelines. European leaders were forced to choose between the Nabucco pipeline that would draw on the Shah Deniz natural gas field in Azerbaijan or Russian supplies from Turkish pipelines and the Nord Stream arteries through the Black Sea.
The decision to leave Nabucco behind left Europe beholden to Russia, but that's changed with the increase in LNG deliveries. Even by 2013, the U.S. Center for Strategic and International Studies was lauding the geopolitical importance of LNG, noting that Russian gas company Gazprom was forced to adjust its prices because of increased LNG supplies in Europe.
By 2023, the tables had turned on Russia, but gas is still a vital component for the global economy. The federal government expects U.S. natural gas production will hover around 100 Bcf/d this year and LNG exports are on pace to increase from to 11.8 Bcf/d for 2023.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Freeport can receive up to 2 billion cubic feet (Bcf/d) of natural gas primarily taken from the inland shale basins in the United States. Data from S&P Global (New York, New York) finds the terminal was scheduled to receive about 743 million cubic feet of gas on Monday.
During the seven-day period ending February 22, deliveries of natural gas to U.S. liquefied natural gas (LNG) export terminals increased by 1% from the previous period to average 13.1 Bcf/d. There were 22 vessels laden with LNG during that period carrying a combined 82 billion cubic feet (Bcf) of gas in liquid form.
One of those vessels left Freeport, which is slowly recovering from a June pipeline explosion that idled the plant for the better part of six months. Much was made earlier this month when the Kmarin Diamond took cargo from LNG, the first since June.
The company in January filed a notice with the Federal Energy Regulatory Commission to start sending LNG into the facility's piping system. It filed another request Monday, saying it was ready to bring Train 1 back into service.
Train 2 is continuing through restart activities and Train 3 has already resumed normal operations. Freeport's return signals a momentous moment not only for U.S. exports but for energy security in general.
Consultant group Wood Mackenzie (Edinburgh, Scotland) said the war in Ukraine in part was a catalyst for interest in long-term LNG contracts for the United States, which taking some of Russia's market share lost to sanctions.
"Record-high prices and the need for energy security drove buyers, which included portfolio players and U.S. producers and infrastructure companies, to seek long-term U.S. LNG deals in 2022 and created huge contracting momentum for projects," said Giles Farrer, head of gas and LNG asset research for Wood Mackenzie.
The United States was the third-largest LNG exporter last year, but Wood Mackenzie expects that--with support from Freeport--U.S. LNG exports will increase by 16% this year. If its forecast is accurate, the United States this year becomes the world's largest exporter of super-cooled gas.
"However, it won't stop there," Wood Mackenzie's report read. The consultant group believes U.S. LNG exports could expand and possibly double in volume by the end of the decade.
Natural gas seems to have overtaken crude oil as a globally essential commodity, particularly with the loss of Russian supplies in the Western market. That sentiment was expressed in an annual outlook from gas-rich Shell plc (NYSE:SHEL) (London, England), which found the British and European economies took in 60% more LNG last year than they did in 2021.
"The war in Ukraine has had far-reaching impacts on energy security around the world and caused structural shifts in the market that are likely to impact the global LNG industry over the long term," said Steve Hill, Shell's executive vice president for energy marketing. For more on the Shell report, see February 27, 2023, article - Shell Sees Large and Growing Gap Between LNG Demand, Supply by 2030.
The gas race in the years leading up to the war centered largely on pipelines. European leaders were forced to choose between the Nabucco pipeline that would draw on the Shah Deniz natural gas field in Azerbaijan or Russian supplies from Turkish pipelines and the Nord Stream arteries through the Black Sea.
The decision to leave Nabucco behind left Europe beholden to Russia, but that's changed with the increase in LNG deliveries. Even by 2013, the U.S. Center for Strategic and International Studies was lauding the geopolitical importance of LNG, noting that Russian gas company Gazprom was forced to adjust its prices because of increased LNG supplies in Europe.
By 2023, the tables had turned on Russia, but gas is still a vital component for the global economy. The federal government expects U.S. natural gas production will hover around 100 Bcf/d this year and LNG exports are on pace to increase from to 11.8 Bcf/d for 2023.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
