LNG global trade has been on the rise for a few years now and it’s not projected to stop. Figure 1 below shows the biggest importers and exporters in the world in 2017.

Figure 1: 2017 LNG Market Trends; Source: IHS Markit

Since then, one of the major changes with regards to top LNG exporters by country has been the United States’ increased market share in this space. The U.S. overtook Russia as an LNG exporter (by volume) in 2017 and is looking to overtake Qatar and Australia to be the #1 Global LNG exporter (by volume) in 2022 (Source: NASDAQ).

Figure 2: Exports for Selected Countries; Source: IEA

In fact, the U.S. just hit the mark on the top LNG exporter by capacity this past month. Ironically enough, Martin J Houston, Vice Chairman and co-founder at Tellurian Investments Inc, discussed this rise in U.S. LNG in the “Why Gas Matters in North America” Darcy Roundtable that took place in October of 2020. Click this link to view the recording.

Figure 3: U.S. LNG imports and exports, 1985-2020

So what’s changed?

Market Dynamics

Increase in U.S. Oil & Gas Production. The Clean Energy Movement. ESG Certifications. COVID-19. All of these have played a part in the U.S.’ 6-year rise to the top of the LNG global market. Most recently, the Russia-Ukraine tensions are making the once Dirty U.S. LNG more appealing to Europeans as it becomes the top location for this export good for the third month in a row.

Regulatory Environment

From our own emissions survey, about 49% of the operators that have responded to our survey have plans, pilots, or have already adopted ESG certifications in an effort to curb climate change and receive differentiated pricing (Source: Darcy Partners).

A few months after EQT announced their commitment for natural gas certification, Mr. Rice sent an open letter to Senator Elizabeth Warren saying “U.S. LNG is the Most Impactful Green Initiative on the Planet”. This 9-page letter went on to show the emissions benefits of not blocking exports of natural gas, incorporating facts and figures throughout the discussion.

“The emissions reduction from coal to gas switching seen in the United States between 2005 and 2019 is the equivalent of actually electrifying approximately 190 million cars, or roughly 70% of the total number of cars in the United States. We are currently projected to have global sales of 31.1 million electric vehicles in 2030. Said another way: what the world expects to achieve in the electric vehicle market over the next 10 years would equate to just 15% of what the natural gas industry has already achieved in the United States alone over the last 15 years.”

-Mr. Rice, EQT

Figure 4: CO2 Reduction Estimates; Source: Tesla, EIA, EQT

Innovation and Technology

While governments and companies are bickering over pipeline rights and permits, innovators have been at work to develop solutions that could address some of these constraints. Edge LNG, our upcoming presenter for the March 1st Sustainability event, is one of them.

Quote from the Edge LNG Website:

"Edge LNG has used their mobile technology to successfully produce and deliver liquified natural gas in the US since May 2019. The technology is suitable for use anywhere in the world where stranded, flared or vented gas is a resource.

The Edge LNG Virtual Pipeline works by deploying Galileo Global Technologies’ transportable CryoboxTM LNG production and liquefaction equipment “at the source” and delivering the LNG directly to customers’ doorsteps. Edge LNG Cryobox units fit on a standard 40 ft tractor-trailer and are designed to be quickly and easily transported. Units are also self-powered using produced gas, removing the need for a grid connection.

“Estimates of remote or stranded gas reserves range from 40 to 60% of the world’s gas resources. This is what Edge taps into, reducing waste and environmental damage in the process”

-- Alexis Sohr (Chief Commercial Officer)"

Not only does this type of technology facilitate liquefaction and address pipeline capacity issues, but it allows operators to monetize otherwise wasted resources and opens the door to utilizing LNG as a cleaner fuel source than diesel in their own operations.

Summary/Take Away

• LNG is here to stay, especially in the U.S.
• Innovations around pipeline capacities exist, and it starts with Virtual Pipeline technology like Edge LNG’s.
• Come to our March 1st forum to learn more about this topic and technology!

Sources

• https://blog.energybrainpool.com/en/lng-market-development-and-trends/
• https://www.iea.org/data-and-statistics/charts/lng-exports-for-selected-countries-2015-2025
• https://www.reuters.com/business/energy/europe-remains-top-destination-us-lng-third-month-2022-02-15/
• https://www.eia.gov/todayinenergy/detail.php?id=37732
• https://www.eia.gov/energyexplained/natural-gas/liquefied-natural-gas.php
• https://www.eqt.com/wp-content/uploads/2021/12/ResponseLetterSenWarren.pdf
• https://edgelng.com/news-and-insights/edge-lng-pioneers-new-way-to-capture-distribute-and-monetize-stranded-and-flared-gas/