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This is How U.S. Emerged as the Top LNG Exporter in 2023
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In a groundbreaking development, the United States has secured its position as the leading liquefied natural gas (“LNG”) exporter, surpassing longstanding leaders Qatar and Australia. Verified by data from reputable sources, the U.S. has set a new record by exporting an unprecedented 91.2 million metric tons of LNG in 2023, marking a remarkable 15% increase in annualized export volumes.
Investors should know that LNG is natural gas that has been cooled to a liquid state, making it significantly more compact for transportation and storage purposes.
December Milestones Propel U.S. Leadership
December 2023 witnessed an extraordinary surge in U.S. LNG exports, with shipments reaching an all-time high of 8.6 million metric tons. This surge positions the United States as the frontrunner in global LNG exports, poised to overtake both Qatar and Australia. This strategic growth aligns with the nation's overarching goal of expanding LNG exports through existing terminals, capitalizing on long-term contracted cash flows, and investing in accretive infrastructure projects.
Driving Forces Behind the Record
Contributing significantly to this feat is the full-service restoration of Freeport LNG, adding 6 million metric tons, and the continuous operations of Venture Global LNG's Calcasieu Pass facility, contributing an additional 3 million metric tons. The full-year exports for 2023 experienced a notable uptick, as mentioned above, reaching around 90 million metric tons.
Global Destinations and Market Dynamics
While Europe remained a primary destination for U.S. LNG exports, accounting for over 61% of shipments in December, the Asian market emerged as a robust second-largest export destination, constituting 26.6% of December's exports. This diversification in global destinations underscores the pivotal role the United States plays in meeting the surging energy demands across the world.
Sustainable Growth and Anticipated Outlook
As the United States solidifies its position as the world's leading LNG exporter, upcoming projects like Venture Global LNG Inc.'s Plaquemines LNG facility and ExxonMobil and QatarEnergy's Golden Pass LNG facility are poised to contribute further to the nation's LNG prowess. With the energy landscape continually evolving, the U.S. anticipates yet another prosperous year in 2024, reinforcing its undisputed dominance in the global LNG market.
5 Stocks to Gain From This Trend
With the dramatic growth of natural gas exports and investors’ strong appetite for LNG stocks, we present five companies — each carrying a Zacks Rank #3 (Hold) — that investors should watch out for.
Shell: Shell’s long-term strategy revolves around LNG. This London-based firm bought BG Group for $50 billion in 2016 to become the world’s largest producer and shipper of LNG. With LNG export demand likely to rise significantly in the near-to-medium term, Shell’s position as a major supplier of LNG should help the company meet the fuel’s growing demand and help cash flow to improve.
Chevron: Chevron is another world-class operator of LNG. The giant Gorgon and Wheatstone developments in Australia, which are part of Chevron’s long-term strategy, are also its flagship LNG developments. These mega projects allow the supermajor to tap into the strong Asian LNG demand. Chevron is the operator of both projects — with a stake of 64.14% in Wheatstone and 47.3% in the Gorgon development.
Cheniere Energy: Being the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, Cheniere Energy certainly enjoys a distinct competitive advantage. The company is primed for significant revenue and earnings growth on the back of solid operations and long-term contracts. Cheniere Energy’s gas supply deals for its Sabine Pass and Corpus Christi projects offer excellent cash flow visibility in the coming years.
Kinder Morgan: As U.S. LNG exports continue to increase, Kinder Morgan will be another firm to reap benefits. In particular, the company’s network of pipelines and storage assets helps it to leverage the growing feedgas deliveries to liquefaction terminals. Apart from providing the infrastructure to facilities operated by others, Kinder Morgan has a 25.5% operating interest in the $2-billion Elba Island export plant.
Energy Transfer: Energy Transfer is also an important player in this space. The partnership’s Lake Charles LNG Terminal provides it with a strong foothold in the global LNG business. The terminal and regasification facility located on Louisiana’s Gulf Coast near Lake Charles has long-term contracts with a wholly owned unit of Shell.
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This is How U.S. Emerged as the Top LNG Exporter in 2023
In a groundbreaking development, the United States has secured its position as the leading liquefied natural gas (“LNG”) exporter, surpassing longstanding leaders Qatar and Australia. Verified by data from reputable sources, the U.S. has set a new record by exporting an unprecedented 91.2 million metric tons of LNG in 2023, marking a remarkable 15% increase in annualized export volumes.
Shell (SHEL - Free Report) , Chevron (CVX - Free Report) , Cheniere Energy (LNG - Free Report) , Kinder Morgan (KMI - Free Report) and Energy Transfer (ET - Free Report) are some of the firms taking advantage of this export boom.
Investors should know that LNG is natural gas that has been cooled to a liquid state, making it significantly more compact for transportation and storage purposes.
December Milestones Propel U.S. Leadership
December 2023 witnessed an extraordinary surge in U.S. LNG exports, with shipments reaching an all-time high of 8.6 million metric tons. This surge positions the United States as the frontrunner in global LNG exports, poised to overtake both Qatar and Australia. This strategic growth aligns with the nation's overarching goal of expanding LNG exports through existing terminals, capitalizing on long-term contracted cash flows, and investing in accretive infrastructure projects.
Driving Forces Behind the Record
Contributing significantly to this feat is the full-service restoration of Freeport LNG, adding 6 million metric tons, and the continuous operations of Venture Global LNG's Calcasieu Pass facility, contributing an additional 3 million metric tons. The full-year exports for 2023 experienced a notable uptick, as mentioned above, reaching around 90 million metric tons.
Global Destinations and Market Dynamics
While Europe remained a primary destination for U.S. LNG exports, accounting for over 61% of shipments in December, the Asian market emerged as a robust second-largest export destination, constituting 26.6% of December's exports. This diversification in global destinations underscores the pivotal role the United States plays in meeting the surging energy demands across the world.
Sustainable Growth and Anticipated Outlook
As the United States solidifies its position as the world's leading LNG exporter, upcoming projects like Venture Global LNG Inc.'s Plaquemines LNG facility and ExxonMobil and QatarEnergy's Golden Pass LNG facility are poised to contribute further to the nation's LNG prowess. With the energy landscape continually evolving, the U.S. anticipates yet another prosperous year in 2024, reinforcing its undisputed dominance in the global LNG market.
5 Stocks to Gain From This Trend
With the dramatic growth of natural gas exports and investors’ strong appetite for LNG stocks, we present five companies — each carrying a Zacks Rank #3 (Hold) — that investors should watch out for.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shell: Shell’s long-term strategy revolves around LNG. This London-based firm bought BG Group for $50 billion in 2016 to become the world’s largest producer and shipper of LNG. With LNG export demand likely to rise significantly in the near-to-medium term, Shell’s position as a major supplier of LNG should help the company meet the fuel’s growing demand and help cash flow to improve.
Chevron: Chevron is another world-class operator of LNG. The giant Gorgon and Wheatstone developments in Australia, which are part of Chevron’s long-term strategy, are also its flagship LNG developments. These mega projects allow the supermajor to tap into the strong Asian LNG demand. Chevron is the operator of both projects — with a stake of 64.14% in Wheatstone and 47.3% in the Gorgon development.
Cheniere Energy: Being the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, Cheniere Energy certainly enjoys a distinct competitive advantage. The company is primed for significant revenue and earnings growth on the back of solid operations and long-term contracts. Cheniere Energy’s gas supply deals for its Sabine Pass and Corpus Christi projects offer excellent cash flow visibility in the coming years.
Kinder Morgan: As U.S. LNG exports continue to increase, Kinder Morgan will be another firm to reap benefits. In particular, the company’s network of pipelines and storage assets helps it to leverage the growing feedgas deliveries to liquefaction terminals. Apart from providing the infrastructure to facilities operated by others, Kinder Morgan has a 25.5% operating interest in the $2-billion Elba Island export plant.
Energy Transfer: Energy Transfer is also an important player in this space. The partnership’s Lake Charles LNG Terminal provides it with a strong foothold in the global LNG business. The terminal and regasification facility located on Louisiana’s Gulf Coast near Lake Charles has long-term contracts with a wholly owned unit of Shell.