EIA sees drop in second half LNG exports
The US Energy Information Administration (EIA) said July 12 it expects to see a 6% decline in US LNG exports in the second half this year compared to the first half, largely due to the continued outage of the Freeport LNG facility in Texas, which has been offline since an early June fire.
In its July Short-Term Energy Outlook, the EIA is projecting second half US LNG exports averaging 10.5bn ft3/day, down 6% from exports in the first half and a 14% drop from the EIA’s June forecast.
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The agency revised its forecast based on the loss of output from Freeport, which is expected to remain offline until late this year. Freeport LNG accounts for about 17% of US LNG export capacity.
“With less LNG being exported in the second half of the year, more natural gas is likely to stay in the domestic market,” EIA administrator Joe DeCarolis said. “We expect lower US natural gas prices for the rest of 2022 than we had previously forecast, but lower prices in 2022 led us to reduce our expectations for natural gas production.”
The EIA is now projecting the US Henry Hub spot price to average $5.97/mnBtu in the second half, down 44% from the June forecast. But with reduced expectations for production growth, Henry Hub is now expected to average $4.36/mnBtu through the last three quarters of 2023, up 14% from the EIA’s June forecast.