The United States saw a substantial increase in natural gas exports in 2023, marking a significant milestone in its energy sector, according to data released by the U.S. Energy Information Administration‘s Natural Gas Monthly report.
The report highlights that US natural gas exports surged by 10% in 2023 compared to the previous year, reaching a record level of 20.9 billion ft3/d. Notably, liquefied natural gas (LNG) exports accounted for more than half of the total exports, with the remainder being exported via pipelines to neighboring Canada and Mexico.
LNG Exports Drive Growth:
LNG exports played a pivotal role in driving the overall growth of US natural gas exports in 2023, witnessing a notable increase of 12% (1.3 billion ft3/d) compared to 2022. December 2023 recorded an average LNG export volume of 13.6 billion ft3/d, marking a new record. The US initiated LNG exports from the Lower 48 states in 2016 with the commencement of operations at the Sabine Pass LNG terminal, which became the first LNG export facility in the Lower 48 states. Furthermore, the US emerged as a significant supplier, providing nearly half of Europe’s LNG imports during the year.
Pipeline Exports Register Growth:
Additionally, natural gas exports via pipelines experienced an uptick in 2023. Exports to Canada increased by 7% to 2.8 billion ft3/d, while exports to Mexico saw an 8% rise to 6.1 billion ft3/d. Notably, the Northeast region witnessed a substantial increase of over 15% in natural gas exports to Canada, primarily driven by a surge in pipeline exports. The majority of pipeline exports to Canada are routed through New York in the Northeast and Michigan in the Midwest.
The surge in pipeline exports to Mexico from Texas, particularly from West Texas, contributed significantly to the overall increase. Pipeline exports from West Texas to Mexico witnessed a remarkable growth of 20% compared to 2022. This trend reflects the steady expansion of connecting pipelines in Central and Southwest Mexico since 2017.
US: A Net Natural Gas Exporter:
Since 2017, the United States has consistently exported more natural gas than it has imported, marking a significant shift in its energy trade dynamics. Even as a net exporter in 2023, the US imported 8 billion ft3/d of natural gas, primarily from Canada via pipelines, to support seasonal fluctuations in domestic consumption.
Decline in Pipeline Imports:
However, natural gas imports via pipelines experienced a slight decline of 3% in 2023 compared to the previous year, totaling 8 billion ft3/d. These imports from Canada, which surpass US natural gas exports to Canada, typically peak during the winter months to meet heightened demand. The decline in imports during January and February 2023 was attributed to milder winter weather and reduced consumption in residential and commercial sectors. Moreover, disruptions caused by wildfires in western Canada further impacted imports during April and May 2023.
Limited LNG Imports:
In contrast to pipeline imports, LNG imports remained relatively modest, with the US importing less than 0.1 billion ft3/d during the past two years. Most LNG imports are directed towards the New England market, where they serve as a crucial supply source during periods of high demand, particularly in winter. However, warmer-than-average temperatures in the Northeast at the beginning and end of 2023 led to reduced natural gas demand, resulting in lower LNG imports compared to 2022.
In summary, the surge in US natural gas exports in 2023 underscores the country’s growing role as a key player in the global energy market, driven primarily by the expansion of LNG exports and pipeline infrastructure.