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United States Turned Net Natural Gas Exporter In April

Jul. 05, 2017 10:36 AM ETAPC, BOIL, CHK, DGAZ, DVN, UGAZF, UNG, LNG8 Comments
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  • The United States exported more natural gas in April to Mexico and other nations than it imported from Canada.
  • Cheniere Energy's third Sabine Pass LNG Train began initial operations in March of 2017.  A fourth train could become operational before the end of the year.
  • Exports to Mexico are expected to continue to grow as additional pipeline capacity is added.

The United States surprisingly exported more natural gas in April than it imported. The trend in growing exports has been in place the last few years. The latest EIA table on supply shown below reports natural gas imports were a negative 9 Bcf in April of 2017. This is the first time in forever the U.S. exported more natural gas to other nations than it imported from Canada.

Cheniere Energy (LNG) has been the key driver in turning the U.S. into a net natural gas exporter. The company entered 2017 with two LNG trains fully operational. Each train can account for up to 0.6 Bcf/d in exports. Cheniere has started operating its third LNG train, and the company plans to have its fourth train operating before the end of the year. Cheniere could be exporting up to 2.4 Bcf/d by the end of 2017.

Exports to Mexico continue to grow. According to the EIA, exports to Mexico reached an all-time high of 4.15 Bcf/d in March of 2017. Mexico has discovered that it is cheaper to import natural gas from the United States than it would cost to develop their own natural gas resources. As long as this remains Mexico's policy, then natural gas exports to Mexico should continue to grow. The chart below shows the dramatic rise in exports to Mexico:

The U.S. currently supplies less than half of Mexico's natural gas demand. It can be expected that the U.S. will not only capture a larger share of the market, but also all of the growing demand for natural gas in Mexico. Additionally, Cheniere Energy can eventually expand its operations to include up to 12 LNG trains. And, Cheniere is not the only company looking at potential LNG exports of natural gas from North America. The bottom line is the U.S. is now poised to be a net-exporter of

This article was written by

HiddenValueInvestor profile picture
Master of Arts Academic, Individual Investor

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