The United States exported a record volume of natural gas in the first half of 2023
The United States exported more natural gas in the first six months of 2023 than in any other previous six-month period, averaging 12.5 billion cubic feet per day (Bcf/d), 11% (1.3 Bcf/d) more than in the same period in 2022, according to our Natural Gas Monthly. In May, U.S. net natural gas exports as liquefied natural gas (LNG) and by pipeline averaged a monthly record high of 13.6 Bcf/d. In 2017, the United States became a net exporter of natural gas (natural gas exports exceeded natural gas imports) for the first time since 1957, primarily because of increased LNG exports. Growth in LNG exports from the Lower 48 states, which started in 2016 when Sabine Pass LNG the first LNG export terminal in the Lower 48 states came online, has led to increased U.S. natural gas exports. In the first half of 2023 (1H23), U.S. LNG exports averaged 11.6 Bcf/d, making the United States the world’s top LNG exporting country. U.S. LNG exports in 1H23 were up 4% (0.5 Bcf/d) compared with a year ago, despite declining in May and June. In 1H23, U.S. natural gas pipeline exports, which go to both Canada and Mexico, averaged 8.8 Bcf/d, or 4% (0.3 Bcf/d) more than in 1H22. U.S. natural gas exports by pipeline to Mexico reached a monthly high of 6.8 Bcf/d in June and accounted for about 66% of total U.S. pipeline exports from January through June. Mexico increased its natural gas imports from the United States in 1H23 to meet electric power sector demand, which has been increasing since 2018. Since 2019, natural gas pipeline exports from West Texas to Mexico have grown steadily as more connecting pipelines in Central and Southwest Mexico have been placed in service. U.S. LNG imports averaged less than 0.1 Bcf/d in 1H23. Almost all LNG imports are delivered into the New England market and can be a key marginal source of supply during periods of high demand, particularly in the winter months of December through February. Warmer-than-average temperatures in the Northeast in the first quarter of 2023 contributed to lower LNG imports compared with the same time in 2022. U.S. natural gas imports by pipeline, which are primarily from Canada, declined by 5% (0.4 Bcf/d) in 1H23 compared with a year ago. Imports from Canada help support seasonal fluctuations in consumption in the United States and generally peak in January or February, with a smaller peak in the summer months. A mild winter, combined with wildfires in Western Canada that disrupted natural gas deliveries to the United States this spring, contributed to lower natural gas imports in 1H23 compared with 1H22.
Market Highlights:
Prices
Henry Hub spot price: The Henry Hub spot price rose 27 cents from $2.49 per million British thermal units (MMBtu) last Wednesday to $2.76/MMBtu yesterday. Henry Hub futures price: The price of the October 2023 NYMEX contract increased 17 cents, from $2.510/MMBtu last Wednesday to $2.680/MMBtu yesterday. The price of the 12-month strip averaging October 2023 through September 2024 futures contracts rose 3.2 cents to $3.240/MMBtu. Select regional spot prices: Natural gas spot prices rose at most locations this report week (Wednesday, September 6, to Wednesday, September 13). Price changes this week ranged from a decrease of $0.81/MMBtu at the Algonquin Citygate to an increase of $1.79/MMBtu at SoCal Citygate. Mid-continent and Gulf Coast spot natural gas prices currently range mostly from $2.00/MMBtu to $3.00/MMBtu. California’s spot natural gas prices were the highest in the country last week. The price at PG&E Citygate in Northern California rose 63 cents, up from $3.74/MMBtu last Wednesday to $4.37/MMBtu yesterday. The price at SoCal Citygate in Southern California increased $1.79 from $3.08/MMBtu last Wednesday to $4.87/MMBtu yesterday. Total consumption of natural gas in California increased 13% (0.6 billion cubic feet per day [Bcf/d]) week over week, driven by a 35% (0.6 Bcf/d) increase in consumption in the electric power sector according to data from S&P Global Commodity Insights (SPGCI). The average temperature in the Riverside Area, inland from Los Angeles, increased 5°F this week, resulting in 35 more cooling degree days (CDD) and increased demand for air conditioning. Natural gas storage inventories at Aliso Canyon, California’s largest natural gas storage facility, reached 44.5 Bcf on September 13, up 2.2 Bcf from September 6. Southern California Gas Company, operator of Aliso Canyon, has been filling the facility ever since the California Public Utility Commission decided to increase the working natural gas storage level, increasing total demand for natural gas in the region. Prices in the Northeast decreased this week, despite an increase in weekly average natural gas consumption. At the Algonquin Citygate, which serves Boston-area consumers, the price fell 81 cents from $2.55/MMBtu last Wednesday to $1.74/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price decreased 44 cents from $2.13/MMBtu last Wednesday to $1.69/MMBtu yesterday. Consumption of natural gas increased slightly this week, up 1% (0.2 Bcf/d) according to data from SPGCI, but temperatures decreased during the week. The average temperature in the Boston Area was 84°F, 15°F higher than normal, at the start of the report week on September 7, but it ended the week more than 10°F cooler at an average 72°F on Wednesday. Temperatures followed a similar pattern over the week in the New York Central Park Area.
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 increased 10 cents to a weekly average of $13.36/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased 23 cents to a weekly average of $10.98/MMBtu. In the same week last year (week ending September 14, 2022), the prices were $53.19/MMBtu in East Asia and $60.81/MMBtu at TTF. Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 36 cents/MMBtu, averaging $7.87/MMBtu for the week ending September 13. Weekly average ethane prices rose 8%, while natural gas prices at the Houston Ship Channel fell 5% week over week, widening the ethane premium to natural gas by 24%. Ethylene spot prices rose 10%, widening the ethylene premium to ethane by 13%. The average weekly propane price rose 6%, while the Brent crude oil price rose 3%. The propane discount relative to crude oil remained relatively unchanged. The normal butane price rose 2%, the isobutane price fell 1%, and the natural gasoline price rose 4%.
Supply and Demand
Supply: According to data from SPGCI, the average total supply of natural gas fell by 0.5% (0.6 Bcf/d) compared with the previous report week. Dry natural gas production decreased by 0.3% (0.3 Bcf/d), driven mostly by a decrease of 0.2 Bcf/d in West Texas as a force majeure was declared by El Paso Natural Gas Company at both the Roswell and Caprock compressor stations in eastern New Mexico. Average net imports from Canada decreased by 4.3% (0.2 Bcf/d) from last week. Demand: Total U.S. consumption of natural gas was unchanged from the previous report week, averaging 72.3 Bcf/d, according to data from SPGCI. Natural gas consumed for power generation declined by 0.1% (less than 0.1 Bcf/d) week over week. Industrial sector consumption increased by 1.1% (0.2 Bcf/d), and residential and commercial sector consumption declined by 2.1% (0.2 Bcf/d). Natural gas exports to Mexico decreased 1.7% (0.1 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.1 Bcf/d, or 0.9 Bcf/d lower than last week.
Liquefied Natural Gas (LNG)
Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals decreased by 6.7% (0.9 Bcf/d) week over week, averaging 12.1 Bcf/d, according to data from SPGCI. Natural gas deliveries to terminals in South Louisiana increased by 3.2% (0.2 Bcf/d) to 8.1 Bcf/d, while deliveries to terminals in South Texas decreased by 26.5% (1.1 Bcf/d) to 3.0 Bcf/d. Nominations on the pipelines that transport natural gas to the Freeport LNG facility located south of Houston, namely the Gulf South Pipeline and Texas Eastern Transmission, were down 86.1% (about 1.3 Bcf) and 68.3% (about 0.1 Bcf) respectively, from September 7 to September 13. Natural gas deliveries to terminals outside the Gulf Coast decreased by 2.6% (less than 0.1 Bcf/d) to 1.0 Bcf/d. Vessels departing U.S. ports: Eighteen LNG vessels (six from Sabine Pass; four each from Cameron and Corpus Christi; three from Calcasieu Pass; and one from Freeport) with a combined LNG-carrying capacity of 67 Bcf departed the United States between September 7 and September 13, according to shipping data provided by Bloomberg Finance, L.P. The last time the weekly count of LNG vessel departures from the United States fell below 20 was the week ending January 4, 2023.
Storage
Net injections into storage totaled 57 Bcf for the week ending September 8, compared with the five-year (2018–2022) average net injections of 76 Bcf and last year’s net injections of 74 Bcf during the same week. Working natural gas stocks totaled 3,205 Bcf, which is 203 Bcf (7%) more than the five-year average and 445 Bcf (16%) more than last year at this time. South Central region net injections rose for the first time since the July 14, 2023, report week. According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from net injections of 41 Bcf to 61 Bcf, with a median estimate of 53 Bcf. The average rate of injections into storage is 6% lower than the five-year average so far in the refill season (April through October). If the rate of injections into storage matched the five-year average of 11.2 Bcf/d for the remainder of the refill season, the total inventory would be 3,798 Bcf on October 31, which is 203 Bcf higher than the five-year average of 3,595 Bcf for that time of year.