U.S. LNG Gas Demand Hits New Record as Europe Looks for New Sources

Demand for natural gas and production from the U.S. hit a new high at the end of 2024 according to a report from Reuters. It comes as Europe further looks to replace Russian supplies and the U.S. industry is expanding its exports to new customers including Ukraine.

Citing data from financial firm LSEG, Reuters reports U.S. production topped 15 billion cubic feed three times in the last two weeks and set a new record of 15.2 bcf on December 31. Reuters says it is a sign of a strong year ahead as U.S. producers bring additional capacity and export terminals online.

The U.S. continues to be the largest exporter of LNG becoming a major supplier to both Europe and Asia. Going into the winter season in the northern hemisphere, the U.S. Energy Information Administration forecasted at the end of November its expectation that the market would remain relatively stable with a supply-demand balance if the weather remains mild as it has in the past two winters. 

Threatening the balance in the market, however, is the end of Russia’s transmission agreement which has seen its gas flowing through Ukraine to the West. Ukraine refused to renew the five-year agreement and Russia’s Gazprom was due to stop the flow today, January 1. While Europe has large stockpiles, it is expected it will turn to the U.S. for increased shipments depending on the weather conditions this winter.

U.S. export operations have been gearing up over the past few weeks. Venture Global reported in the middle of December that the first phase of its second facility, Plaquemines LNG, in Port Sulphur, Louisiana, had achieved its first production becoming the U.S.’s eighth LNG export facility.  When completed the facility will become one of the industry’s largest with a production capacity of 20 MTPA.

Plaquemines LNG loaded its first cargo last week aboard one of the company’s dedicated LNG carriers, the Venture Bayou, a new 174,000 cbm LNG carrier built in South Korea by Samsung Heavy Industries. The vessel which is the first one nine for the company’s fleet is currently bound for Germany.

At the end of last week, Gaslog Savannah (155,000 cbm) arrived from the United States at Greece’s Revithoussa LNG terminal. The consignment of approximately 100 million cubic meters of LNG was purchased by DTEK, Ukraine’s largest private energy company. It was its first purchase from the U.S. 

Because of war-related restrictions on the transit of LNG in the Black Sea, the company is having to use a convoluted method to obtain the gas. It is being re-gasified in Greece and fed into the European network, exchanged through the European Union to reach Ukraine’s gas network. DTEK says it expects to receive additional U.S. shipments and will look to expand its LNG activities into northern Europe and the Baltics.

Freeport LNG highlighted yesterday, December 31, that it had completed its 800th shipment of natural gas. The shipment was loaded for Japan’s JERA which has a large supply agreement and is an investor in the plant. It is the latest sign of recovery for Freeport LNG which was knocked offline in 2022 by an explosion and did not get permission to resume full operations till March 2023. Freeport LNG is moving forward with its plans to add a fourth train to the facility.

Other U.S. companies are also moving forward with their expansion projects. In addition to Venture Global, Cheniere Energy announced on December 30 the first LNG from its Corpus Christi Stage 3 Liquefaction Project. A joint venture between Exxon Mobile and QatarEnergy is also moving forward on the Gulf Coast and is projected to start production possibly in late 2025 or early 2026.

Despite the expansion underway in Qatar, the U.S. EIA forecasts continued steady growth for the U.S. industry. It projected capacity will surpass 20 bcfd by 2026 and 24 bcfd by 2028.