Europe was the main destination for U.S. LNG exports in 2022:
U.S. exports of liquefied natural gas (LNG) averaged 10.6 billion cubic feet per day (Bcf/d) in 2022, increasing by 9% (0.8 Bcf/d) compared with 2021, according to our Natural Gas Monthly. The increase in U.S. LNG exports was driven by strong LNG demand in Europe, high international natural gas prices, and expanded U.S. liquefaction capacity. U.S. LNG exports to Europe increased 141%, or 4.0 Bcf/d, compared with 2021. U.S. LNG exports to Europe (the European Union [EU-27] plus the United Kingdom) increased as a result of both natural gas supply challenges in Europe after Russian pipeline exports to the region declined to 40-year lows, and higher prices at Europe’s natural gas trading hubs relative to other LNG markets. Europe became the primary destination for U.S. LNG exports in 2022, accounting for 64% (6.8 Bcf/d) of total exports. Four countries—France, the U.K., Spain, and the Netherlands—accounted for a combined 74% (5.0 Bcf/d) of U.S. LNG exports to Europe. In 2022, Europe increased LNG imports to an all-time annual high of 14.9 Bcf/d, 65% (5.9 Bcf/d) more than in the previous year, according to data from Cedigaz. Similar to 2021, three countries—the United States, Qatar, and Russia—provided 73% (10.8 Bcf/d) of Europe’s LNG imports in 2022. Excluding intra-regional trade, the remaining 3.8 Bcf/d of LNG imports was supplied by 14 other LNG-exporting countries. Europe’s LNG import capacity expanded in 2022, and we expect it to grow by one-third by the end of 2024, as countries add new LNG regasification facilities and expand existing import terminals. U.S. LNG exports to Asia declined by 46% (2.1 Bcf/d) and averaged 2.5 Bcf/d in 2022. Most countries in Asia reduced LNG imports from the United States last year compared with 2021. The most notable reduction was in U.S. LNG exports to China, which decreased by 78% (1.0 Bcf/d). China’s annual LNG imports from all countries declined 20% (2.1 Bcf/d) in 2022 compared with 2021, and were at the lowest levels since 2019 according to data from China’s General Administration of Customs. China’s natural gas imports by pipeline increased by 8% (0.4 Bcf/d) compared with the previous year. U.S. LNG exports to eight countries in Latin America declined by 62% (1.1 Bcf/d) in 2022. The largest decline was in exports to Brazil by 77% (0.6 Bcf/d) as increased availability of hydroelectric power reduced natural gas demand for electricity generation at Brazil’s natural gas-fired power plants. In 2022, Kuwait was the only country in the Middle East that imported U.S. LNG, with exports averaging 0.2 Bcf/d, or twice 2021 levels.
Henry Hub spot price: The Henry Hub spot price fell 6 cents from $2.50 per million British thermal units (MMBtu) last Wednesday to $2.44/MMBtu yesterday. Henry Hub futures prices: The price of the April 2023 NYMEX contract decreased 11.2 cents, from $2.551/MMBtu last Wednesday to $2.439/MMBtu yesterday. The price of the 12-month strip averaging April 2023 through March 2024 futures contracts declined 20.6 cents to $3.179/MMBtu. Select regional spot prices: Natural gas spot prices fell at most locations this report week (Wednesday, March 8 to Wednesday, March 15). Week-over-week price declines ranged from $3.74/MMBtu at Northwest Sumas to 6 cents/MMBtu at Henry Hub. The biggest week-over-week declines in spot natural gas prices were at western trading hubs. The price at Sumas on the Canada-Washington border, the main pricing point in the Pacific Northwest, fell $3.74 from $7.16/MMBtu last Wednesday to $3.42/MMBtu yesterday. According to data from S&P Global Commodity Insights, total natural gas consumption in the Pacific Northwest decreased 7%, or 0.2 billion cubic feet per day (Bcf/d) week over week, driven by a 14% (0.2 Bcf/d) decline in residential and commercial sector consumption. The price at Malin, Oregon, the northern delivery point into the PG&E service territory, fell $1.48 from $7.52/MMBtu last Wednesday to $6.04/MMBtu yesterday, leading to a $1.86/MMBtu decline in the price at the PG&E Citygate in Northern California from $8.80/MMBtu last Wednesday to $6.94/MMBtu yesterday. Natural gas consumption in California decreased 18% (1.2 Bcf/d) week over week, while supply increased 5% (0.3 Bcf/d), in part due to an 11% increase (0.2 Bcf/d) in natural gas deliveries from the Pacific Northwest. At the Algonquin Citygate, which serves Boston-area consumers, the price went down 47 cents from $2.97/MMBtu last Wednesday to $2.50/MMBtu yesterday. Natural gas consumption in New England decreased 3% (0.1 Bcf/d) week over week, driven by an 8% decrease in residential and commercial sector consumption, according to data from S&P Global Commodity Insights. This year, New England consumed less natural gas in January (17%) and February (9%) than in the same months in 2022, according to data from S&P Global Commodity Insights. Lower natural gas consumption this winter compared with last winter has allowed natural gas inventories in the East to attain levels that are 33% above year-ago levels and 21% above the five-year (2018–2022) average, as of the week ending March 10, 2023.
Daily spot prices by region are available on the EIA website.
International futures prices: International natural gas futures prices increased this report week. According to Bloomberg Finance, L.P., weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia rose 1 cent to a weekly average of $14.22/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased 91 cents to a weekly average of $14.57/MMBtu. In the same week last year (week ending March 16, 2022), the prices were $36.76/MMBtu in East Asia and $37.95/MMBtu at TTF. Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 83 cents/MMBtu, averaging $7.36/MMBtu for the week ending March 15. Ethane prices fell 3%, while natural gas prices at the Houston Ship Channel fell 8% week over week, widening the ethane premium to natural gas by 5%. Ethylene spot prices were flat, widening the ethylene to ethane premium by 2%. The Brent crude oil price fell 4%, while propane prices fell 13%, resulting in a 16% increase in the propane discount relative to crude oil. Prices fell for normal butane (19%) and isobutane (8%), as motor gasoline specifications transition to summer blend, reducing demand for butanes as a blendstock. The natural gasoline price fell 8%.
Supply and Demand
Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 0.8% (0.8 Bcf/d) compared with the previous report week. Dry natural gas production grew by 0.3% (0.3 Bcf/d), and average net imports from Canada increased by 10.1% (0.4 Bcf/d) from last week. Demand: Total U.S. consumption of natural gas rose by 5.5% (4.7 Bcf/d) compared with the previous report week, according to data from S&P Global Commodity Insights. In the residential and commercial sectors, consumption increased by 12.4% (3.9 Bcf/d) as below-normal temperatures spread across much of the United States this week. Natural gas consumed for power generation rose 1.2% (0.4 Bcf/d) week over week, and industrial sector consumption increased by 1.9% (0.5 Bcf/d). Natural gas exports to Mexico were relatively flat this week. Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 13.1 Bcf/d, or 0.1 Bcf/d lower than last week.
Liquefied Natural Gas (LNG)
Pipeline receipts: Overall natural gas deliveries to U.S. LNG export terminals decreased by 0.8% (0.1 Bcf/d) week over week to 13.1 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana increased by 1.2% (0.1 Bcf/d) to 8.7 Bcf/d, while deliveries to Texas terminals decreased by 5.9% (0.2 Bcf/d) to 3.2 Bcf/d. Natural gas deliveries to terminals along the East Coast were unchanged week over week. Vessels departing U.S. ports: Twenty-two LNG vessels (nine from Sabine Pass; four from Corpus Christi; three each from Calcasieu Pass and Cameron; and one each from Cove Point, Elba Island, and Freeport) with a combined LNG-carrying capacity of 83 Bcf departed the United States between March 9 and March 15, according to shipping data provided by Bloomberg Finance, L.P.
The net withdrawals from storage totaled 58 Bcf for the week ending March 10, compared with the five-year (2018–2022) average net withdrawals of 77 Bcf and last year’s net withdrawals of 86 Bcf during the same week. Working natural gas stocks totaled 1,972 Bcf, which is 378 Bcf (24%) more than the five-year average and 521 Bcf (36%) more than last year at this time. According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from net withdrawals of 49 Bcf to 76 Bcf, with a median estimate of 59 Bcf.
The average rate of withdrawals from storage is 24% lower than the five-year average so far in the withdrawal season (November through March). If the rate of withdrawals from storage matched the five-year average of 3.0 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,910 Bcf on March 31, which is 378 Bcf higher than the five-year average of 1,532 Bcf for that time of year.