Increased U.S. natural gas production in 2023 is boosting LNG and ethane exports
Energize Weekly, September 20, 2023
Record U.S. natural gas production in 2023 is leading to a record ethane production and liquified natural gas (LNG) exports, according to the federal Energy Information Administration (EIA).
The EIA is forecasting 2023 dry gas production will be up 5 percent to 102.7 billion cubic feet a day (bcfd) compared to 2022’s record output. The agency projects production will rise to 104.9 bcfd in 2024.
This production helped U.S. operators to export more LNG than any other country in the first half of 2023 as global LNG demand remained strong particularly in Europe, according to data from CEDIGAZ, an international gas market data organization.
U.S. ethane exports also set a record in March 2023 at 537,00 barrels a day, with an average of 493,000 barrels a day for the first six months of the year, up 90,000 barrels a day from the same period in 2022.
“The United States has exported ethane for nearly a decade and became the world’s largest exporter of ethane in 2015,” the EIA said.
Along with the dry gas, natural gas liquids – ethane, propane, butane, isobutane, and pentane – are recovered at gas processing facilities.
Domestic production of ethane, which is primarily used as a petrochemical feedstock, reached a new monthly record of 2.7 million barrels per day in April 2023, continuing the upward trend that started in 2013, the EIA said.
LNG exports from the U.S. averaged 11.6 bcfd during the first half of 2023, a 4 percent increase over the first half of 2022. Australia was the second largest exporter averaging 10.6 bcfd for the first half of 2023, followed by Qatar at 10.4 bcfd.
The boost in U.S. exports primarily came with the return to service of Freeport LNG’s facility at Quintana Island, Texas, the country’s second largest, which was shut by a fire in June 2022.
“U.S. LNG exports set a monthly record of 12.4 bcfd in April as Freeport LNG ramped up LNG production and as Europe and the UK continued to increase LNG imports to compensate for reduced pipeline imports from Russia and to refill storage inventories,” the EIA said.
The agency is forecasting exports will reach 13.14 bcfd in 2024.
Ethane production in the Texas and New Mexico portions of the Permian Basin accounted for 60 percent of U.S. ethane production in the first half of 2023.
Ethane production in those two districts averaged 1.5 million barrels a day in the first half of 2023, a 10 percent increase from the same period in 2022. Ethane production in other areas was essentially unchanged.
“U.S. ethane production grew in response to rising demand from both domestic and global consumers,” the EIA said.
In the first half of 2023, an average of 2.1 million barrels a day of ethane was used in the U.S. Ethane consumption set a record of 2.2 million barrels a day in May 2023.