Global trade of liquefied natural gas saw record growth last year amid a boom in U.S. energy production that allowed Houston's Cheniere Energy to ramp up exports to meet growing demand in Asia and elsewhere.
Trade volumes reached 38.2 billion cubic feet per day, up 10% from 2016, the U.S. Department of Energy reported on June 11. The U.S. and Australia, another major natural gas producer, accounted for much of the growth, adding a combined 2.7 billion cubic feet per day in LNG exports.
China, now implementing an environmental crackdown on coal producers and other industrial polluters to reduce dangerous smog levels, became the world's second largest importer of LNG behind Japan. Its annual imports skyrocketed more that 40% to 39 million tonnes.
Other Asian countries, including South Korea, Pakistan, Taiwan, and Thailand, also added to global demand as they work to address air pollution problems and meet emissions reductions targets under the United Nations climate accord.
The growth in LNG trading comes amid a surge in domestic oil and gas production. Energy companies have unlocked vast reserves of natural gas from shale basins in West Texas and elsewhere, positioning the U.S. to become a dominant player in the global LNG export market.
In 2016, Cheniere Energy became the first U.S. company to export LNG from its Sabine Pass facility in Louisiana. Since then, the company has quickly expanded operations to ship to at least 20 foreign markets.
Cheniere earlier this year capitalized on China's shift to cleaning-burning energy sources when it signed two long-term deals to sell LNG to PetroChina International Co., a subsidiary of China's state-controlled oil and gas giant. Those sale contracts extend through 2043.
The company, anticipating further demand growth, last month decided to build a third LNG processing unit at its second export hub now under construction in Corpus Christi. Once operational, that facility is expected to make the company one of the largest U.S. buyers of natural gas.
Dominion Energy of Richmond, Va., also began exporting LNG from a terminal in Maryland in March. Other U.S. companies are expected to follow later this year, including two Houston firms, Freeport LNG, which will operate a Gulf Coast terminal at Quintana Island, and Kinder Morgan, which is completing an export terminal in Georgia.
Several other companies, including Sempra Energy and Tellurian of Houston, are working on projects expected to start up in the coming years.
Sources:sxcoal
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