September saw the US increase its exports of Liquified Natural Gas (LNG) to Europe according to a report by Reuters which examined data from Refinitiv Eikon. However exports were below normal for the year so far, due to the explosions at the Freeport LNG export terminal in Texas, which substantially diminished export volumes.
The explosion in the Freeport LNG terminal, the second largest liquefaction facility in the US, caused production overall to lag behind full capacity. Prior to the explosion, the Freeport LNG facility accounted for a fifth of all LNG exports.
However as Russian supplies have been reduced by everything from Western sanctions, to the sabotage of the Nord Stream 1 and Nord Stream 2 pipelines, to disputes over transport fees, the prices and the demand for US LNG to replace the lost supplies has only gone up.
This has caused Europe to supersede Asia as the largest importer of US LNG for the first time. September saw 6.3 million tons of LNG, in 87 shipments, make its way to Europe, just beating August’s 6.25 million tons. That meant US LNG exports to Europe accounted for 70% of the total, up from 56% in August, and 63% in July.
The US had been shipping almost 75% of all LNG shipments to Europe in the first four months of the year, according to data from the US Energy Information Administration. As a result the US now accounts for almost 50% of the EU’s LNG imports, which is up roughly 100% over 2021.
However Europe made up the lost Russian supplies at a cost. Experts say the cost of the gas Europe bought to fill its reserves this year was roughly ten times the normal cost.
The increased shipments to Europe have impacted the markets in Asia, Latin America, and the Caribbean where they were diverted from, tightening those markets, and driving up prices there as well.
The Daily Financial Trends