The U.S. is transitioning into a natural gas exporter

The United States is on track to become a net exporter of gas next year, driven largely by the growth of liquefied natural gas exports, according to the U.S. Energy Department.

The U.S. started exporting LNG last year, courtesy of Houston-based Cheniere Energy, and the country is increasingly piping more natural gas to Mexico while, simultaneously, importing less gas via pipeline from Canada. The U.S. was still an overall net importer last year.

The nation is projected to become a net exporter of total energy products shortly after 2020, the Energy Department said, which was a virtually unheard of proposition just a decade ago.

Cheniere’s first LNG export facility at Louisiana’s Sabine Pass near the Texas border came online a year ago. Houston-based Freeport LNG Development’s export terminal is slated to start shipping LNG in 2018. Three other LNG export projects will be completed or under construction by 2021, including Cheniere’s other facility near Corpus Christi.

Because of the U.S. projects and a glut of new LNG exports from Australia, the world is projected to remain oversupplied with LNG beyond 2020, according to a new Moody’s Investors Service report. Likewise, the two largest LNG customers, Japan and South Korea, are expected to either have their demand decrease or remain flat.

China, India and other emerging markets will require more LNG in the future, but global demand won’t catch up with production until after 2020, Moody’s projects. After all, total new LNG global supplies will surge 44 percent from 2015 to 2020.

However, the U.S. will keep exporting more natural gas by pipeline to Mexico to feed power plants for electricity generation. U.S. natural gas exports to Mexico have doubled since 2009 and will continue growing through 2020. Several pipeline projects are currently under construction.

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