Raymond James Energy Stat of the Week
by J. Marshall Adkins

Energy Stat: U.S. LNG Exports Set for Breakout Year in 2018, but Canadian Projects Still Languishing
April 24, 2017

It was all the way back in 2012 that we started actively writing about the notion that North America could plausibly become a sizable exporter of LNG. Until just the past year, it was entirely a ''show-me'' story. Now that Sabine Pass has become a bona fide driver of gas demand, there is proof of concept, but volumes are still not needle-moving in the context of the world's largest gas market. That will not change much in 2017, but 2018 is shaping up to be a breakout year for LNG exports.

The reason is simple: for the first time, 2018 should see exports from four separate LNG projects, versus just one currently. To be sure, the ramp-up at each individual project will take time (frequently longer than expected), so the significance of startup headlines should not be exaggerated. That being said, we project LNG exports averaging 2.5 Bcf/d in 2018 - up from 0.5 Bcf/d in 2016 and 1.2 Bcf/d in 2017 - en route to about 9 Bcf/d in 2021. Finally, the resulting uplift for gas demand is about to become economically relevant (though the concurrent supply growth makes the overall picture far from bullish). All of this is coming from U.S. LNG facilities, since none of the Canadian projects are currently in construction. U.S. and North American LNG exports will be interchangeable until at least the end of the decade. In today's Stat, we provide an update on the landscape, and address the disconnect between the U.S. and Canada in LNG development.


This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.

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