US may be net exporter of natural gas by 2018

Liquefied natural gas exports expected to drive growth in U.S. natural gas trade

liquified natural gas exports
(U.S. Energy Information Administration graphic)

WASHINGTON — The United States is expected to become a net exporter of natural gas on an average annual basis by 2018, according to a recently released Annual Energy Outlook update from the U.S. Energy Information Administration. The transition to net exporter is driven by declining pipeline imports, growing pipeline exports, and increasing exports of liquefied natural gas (LNG).

The United States is also projected to become a net exporter of total energy in the 2020s, in large part because of increasing natural gas exports.

In 2016, the United States was a net importer of natural gas, with net imports of 0.9 trillion cubic feet (Tcf), or 2.6 billion cubic feet per day (Bcf/d). As several LNG export projects currently under construction are completed, LNG exports are expected to make up a growing share of natural gas exports and to surpass pipeline exports of natural gas by 2020.

The Sabine Pass facility in Louisiana became the first operating LNG export facility in the Lower 48 states in 2016.

Construction underway

By 2021, four LNG export facilities currently under construction are expected to be completed. Combined, these five plants are expected to have an operational export capacity of 9.2 billion cubic feet per day.

After 2021, projected U.S. exports of LNG grow at a more modest rate as U.S. natural gas faces growing competition from other global LNG suppliers.

Pipeline exports

U.S. exports of natural gas by pipeline to Mexico are also expected to increase. U.S. exports to Mexico have doubled since 2009 and are projected to continue rising through at least 2020 as pipeline projects currently under construction are completed.

U.S. imports of natural gas, most of which come by pipeline from western Canada, are projected to continue declining. In addition to importing less natural gas from Canada, primarily from Alberta, increasing amounts of natural gas from the Marcellus and Utica basins in the Northeast and Midwest regions of the United States are expected to flow to eastern Canadian provinces.

Despite these trends, the United States is expected to remain a net importer of natural gas by pipeline from Canada through 2040.

Slower growth pace

The growth of natural gas exports, especially from new LNG terminals, sustains continued growth in U.S. natural gas production. In the outlook, natural gas production is projected to grow through 2020 at about the same rate (3.6% annual average) as it has since 2005, when production of natural gas from shale formations began to grow rapidly. After 2020, natural gas production will grow at a lower rate (1.0% annual average) as net export growth moderates, energy efficiencies increase, and natural gas prices slowly rise.

Natural gas production and trade vary with different assumptions for resources and technology, macroeconomic growth, and world oil prices. Most experts predict larger natural gas resource estimates and improved drilling technology will lead to higher domestic natural gas production, lower U.S. natural gas prices, and therefore, greater natural gas exports.

In a scenario with more pessimistic assumptions for oil and gas resources and technology or a scenario with low world oil prices, LNG exports still increase, but remain below the report’s predictions.


Up-to-date agriculture news in your inbox!



We are glad you have chosen to leave a comment. Please keep in mind that comments are moderated according to our comment policy.

Receive emails as this discussion progresses.