1 of 3 | Restarting after a June pipeline explosion, the Freeport LNG export facility is expected to help the United States become the world's leading deliverer of the super-cooled gas. Photo courtesy of Freeport LNG.
Feb. 22 (UPI) -- With the long-idled Freeport LNG export terminal returning to service, consultant group Wood Mackenzie on Wednesday said the United States will easily take the global lead for LNG exports this year.
Wood Mackenzie estimates the United States was the third-largest exporter of super-cooled liquid gas last year. Total exports are expected to increase by 16% this year, supported by the resumption of operations at Freeport. That means U.S. exports leapfrog Australia and Qatar to take the global lead this year
Idled since a June pipeline explosion, the operators at Freeport LNG said Tuesday they received federal approval to resume normal operations. The company is starting with just one train -- a system that cools gas to the liquid form -- out of the three installed.
At full capacity, Freeport LNG makes up about one-fifth of U.S. natural gas exports as LNG.
Giles Fareer, the head of gas and LNG research at Wood Mackenzie, said the geopolitical premium from the war in Ukraine supported higher natural gas prices last year and led to a surge in long-term export deals, which "created huge momentum" for project development.
"This activity has pushed a host of pre-final-investment-decision U.S. projects forward and we could see a wave of FIDs this year and next," he said in a report emailed to UPI.
Gas producer Tellurian said Wednesday it already invested some $1 billion to bring its planned Driftwood liquefied natural gas export facility to the construction phase. The plant would be situated near the coast of Louisiana and have the capacity to export the equivalent of about 14% of total U.S. exports of LNG currently.
Shell, which saw natural gas support much of its revenue in the fourth quarter, expects the LNG market will tighten as demand surges on the back of limited supplies. Europe's increasing demand will compete with Asia over limited supplies over the next few years.
"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," Steve Hill, Shell's executive vice president for energy marketing, said.
Last year, the European and British economies took in 60% more LNG than they did in 2021, which allowed the region to tolerate the shortage of piped gas from Russia that came as a result of sanctions, Shell said.
The U.S. federal government said, however, that it expected exports to Europe would be slightly lower than last year because commercial stockpiles of natural gas are on the rise. But once Freeport is back at full capacity, LNG exports are expected to be 11% higher than last year.