You are here
Home > BUSINESS > Why U.S. imports LNG from Nigeria, Russia

Why U.S. imports LNG from Nigeria, Russia

Why U.S. imports LNG from Nigeria, Russia

Please follow and like us:

  • 14
  • Share

More than a decade, the United States (U.S.) shale boom keeps breaking output records, with fields from Pennsylvania to Texas producing more natural gas than the country needs. That has triggered billions of dollars of investments to ship liquefied natural gas (LNG) overseas. Yet the U.S. is still importing LNG from countries such as Nigeria and Russia. There are two reasons for that: pipeline bottlenecks and the requirements of a 1920 law meant to support a robust U.S. shipping industry.

Gas production jumped 12 per cent last year to a record 89.6 billion cubic feet a day while consumption was 81.7 billion cubic feet per day, according to the U.S. Energy Information Administration. The problem is getting it to the right places at the right time because of insufficient pipeline capacity near big metropolitan centers. Pipelines historically have been designed to operate at a reduced rate for most of the year so that when a cold snap hits, there’s space for a surge in demand. But with the shale boom, many households, power plants and factories have switched from fuels such as heating oil and coal to take advantage of cheap gas. This added consumption means that some lines are close to full year-round and are thus unable to cope when demand peaks.

Gas shortages occur mostly in the Northeast. The region was the destination of most of the 200 million cubic feet a day of LNG the U.S. imported in the first 10 months of 2018. In January 2018, frigid weather sent New York City spot gas to a whopping $175 per million British thermal units, compared with less than $3 elsewhere in the country, as gas distributors engaged in bidding wars for pipeline space.

Surplus U.S. gas supply allowed America’s booming LNG industry to ship 2.8 billion cubic feet a day to overseas markets during the first 10 months of 2018, according to the EIA.

Facebook Comments

Please follow and like us:

  • 14
  • Share

Leave a Reply

Top