US LNG Exports to Asia and Europe – Steep Competition Ahead for Regions

27 November 2023

The United States LNG continues to find a home in Europe as forecasts of lower temperatures to storm the market, bringing a steep competition for Asian region. The U.S. also supplies liquified natural gas (LNG) to Asia, so the fight for additional spot volumes will be increasingly important this winter. Once a cold snap hit the market, Asia and Europe will be battling with receiving the extra LNG cargoes out of the United States.

Recent droughts at the Panama Canal as well as persistent milder temperature forecasts have subdued Asia’s competitiveness for LNG imports from the U.S. However, with winters setting up, the battle could intensify in the coming months as prices are supported by heating demand of LNG.

US LNG Exports to the World

US LNG exports to the world is increasing every year due to high demand from Europe and Asia. According to a report, LNG exports from the United States totalled USD 5,848 million in 2018, that dollar amount increased to USD 47,331 million in 2022. Here is a chart showing US LNG exports to the world from 2018 to 2022.

 

Quarterly, US LNG exports totalled USD 9,479 million in Q1 of 2022, that increased to USD 10,500 in Q1 of 2023. Similarly, the other quarters of 2023 also recorded a rise in the value of LNG shipments as compared to the same quarters of 2022. Take a look at the chart to understand the US LNG export market from Q1 of 2022 to Q3 of 2023.

 

US LNG Exports to Asia and Europe

Although temperatures to fall in the US, Europe and Asia, the demand of US LNG is expected to rise further and give tough competition among the regions. In addition, with the weaker-than-expected growth and demand signals from Asia, as well as the ongoing Panama Canal drought, any extra cargoes from the U.S. have been heading to Europe. Additional costs in taking longer routes due to the delays at Panama Canal, have also depressed any extra US volumes flowing to Asia.

As we know the United States exports liquified natural gas more to the European countries as compared to the Asian region; there will be a competition between the regions. It is anticipated that the Asian market for US LNG exports is expected to rise in the coming months. According to a report, US LNG exports to Europe were higher than that of Asia in all quarters in 2022 and 2023. Take a look at the chart to understand and make a comparison of US LNG exports to Asia and Europe.

 

Yearly-wise, US LNG exports to Europe have constantly increased in the last couple of years. In fact, the United States recorded 4 times higher value of LNG exports to Europe in 2022. US LNG exports to Asia have also been increased in the last five year, however, the year 2022 saw a slight dip in the value of shipments. Here is a complete data visualization of US LNG exports to Europe and Asia from 2018 to 2022.

 

List of US Top Export Destinations of LNG 2022

As European countries are the largest export destinations of US LNG, the highest number of liquified natural gas shipments were arrived in France from the United States in 2022. France was followed by the United Kingdom, Spain, the Netherlands, South Korea, Poland, Japan, Turkey, China, India, Italy, Croatia, Taipei, Chinese and Argentina. Here is the list of US top export destinations of LNG with their values in US dollar and percentage as well.

 

As demand begins to increase and the delays at the Panama Canal persist, logistics costs out of the United States will increase. To keep the arbitrage open, US prices and freight will either have to decline or Europe and Asia will have to price higher to continue the flow of supplementary LNG volumes.