There is no doubt about it, there is a competitive edge in everyone, even just for a fleeting second, because back to the early cavemen days of survival, it is natural instinct built into all of us. The Guinness World Records exists for this literal reason, to be the ‘world’s greatest’ at something is just the peak of all achievements. From the most hula hoops spun simultaneously to the fastest window cleaner to the World’s Strongest Man, to be number one is an accolade many devote their lives to.
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The LNG industry is not that different, for instance, as we arrive in 2022 there is intrigue as to which country will be the world’s largest exporter and largest importer this year. A report published by IHS Markit, entitled ‘LNG Trade in 2021: Runaway Recovery’ provides commentary on the competition, detailing how the US is poised to become the top LNG exporter in 2022, having been third in line in 2021 behind Australia and Qatar but now creeping up for the overtake.
The US is on a rapid journey of expansion, building up liquefaction capacity and ramping up output from plants. Export capacity additions to US projects are being introduced through the course of the year, with Calcasieu Pass LNG having started commissioning activities for its 18 liquefaction trains in November 2021, thus first LNG production is not long away. Further, Sabine Pass LNG’s Train 6 – adding up to 0.76 billion ft3/d of export capacity – shipped its first cargo of LNG in December 2021, so 2022 will continue this production. In addition, requests to increase LNG production at the Sabine Pass and Corpus Christi LNG terminals by 0.7 billion ft3/d were approved in October 2021 by the US Federal Energy Regulatory Commission (FERC), and these increases will be achieved through optimising operations and modifying current maintenance plans.
As a result of the combination of new export capacity additions and plant increases, the US will reign supreme with the world’s largest LNG export capacity. However, there is still competition from Qatar. In May 2021, Qatar’s self-imposed 12-year moratorium on further developing LNG extraction from the North Field was lifted, allowing QatarEnergy to advance its North Field Expansion (NFE). The NFE will give the country the opportunity to take the lead back from the US – the project will achieve a 67% production increase by 2027 – but this is several years down the line once the project enters service.
On the other hand, Australia has likely almost reached its peak of LNG production, with a natural decline in the gas fields that feed current projects, as well as only a handful of planned projects in the pipeline. Last year saw the announcement of Santos’ Barossa project and Woodside’s Scarborough project, but similar to Qatar’s NFE, LNG is not expected until 2025/2026. With these projects coming online and other gas sources becoming exhausted, it is unlikely Australia can reach new levels of LNG production, indicating that the US’s spot at the top will be secure for quite some years to come.
To really see things clearly – who is taking home gold, silver, and bronze for best LNG exporter – let us consider the figures. By the end of 2022, US peak LNG production capacity is to increase to 13.9 billion ft3/d, Australia’s peak capacity is 11.4 billion ft3/d, and Qatar at 10.4 billion ft3/d. The future is never certain though, there is always space for change, and it is that element that keeps this moving industry interesting.