EIA: winter demand and rising US LNG exports to boost gas prices

The US Energy Information Administration expects natural gas prices to increase from November levels as a result of both higher winter natural gas demand and rising LNG exports.

According to EIA’s latest short-term energy outlook, its forecast for the Henry Hub spot price averages more than $6.00 per million British thermal units (MMBtu) in 1Q23, up from November’s monthly average of about $5.50/MMBtu.

The agency expects natural gas prices would begin declining after January as US storage levels move closer to the previous five-year average, largely as a result of rising US natural gas production.

However, the possibility of price volatility remains high, it said.

US LNG exports to hit record

The agency expects US natural gas exports to increase in 2023, driven largely by growth in LNG exports.

US LNG exports peaked in the first half of 2022 as facilities operated close to maximum capacity, and a new facility, Venture Global LNG’s Calcasieu Pass, came online and steadily increased output in 2022.

However, a fire at Freeport LNG in June resulted in the shutdown of the facility, removing about 2.0 billion cubic feet per day (Bcf/d) of U.S. LNG export capacity in 2H22.

Freeport LNG is now expecting to restart operations at its facility in Texas by the end of this year.

“When Freeport LNG resumes, we forecast US LNG exports will establish a new record close to 12.5 Bcf/d in March 2023. We expect LNG exports will then reach 12.7 Bcf/d by the end of 2023,” EIA said.

No new US LNG export facilities are scheduled to come online in 2023 and EIA forecasts US LNG exports would average 12.3 Bcf/d throughout 2023 as facilities continue to operate close to maximum capacity to meet high demand for natural gas in Europe and Asia.

- Advertisements -

Most Popular

More News Like This

US weekly LNG exports up to 25 cargoes

US liquefied natural gas (LNG) exports rose in the week ending January 25 while the Henry Hub spot price...

LNG freight rates continue to drop in both basins

Spot charter rates for the global LNG carrier fleet are continuing to drop in both basins as vessel availability...

US weekly LNG exports drop to 22 cargoes

US liquefied natural gas (LNG) exports dropped in the week ending January 18 while the Henry Hub spot price...

UK was top destination for US LNG supplies in November

The UK was the top destination for US LNG exports in November as Europe continues to receive most of...