US LNG boom will soon end in multibillion-dollar financial losses

January 5 2023

A few years ago, the idea that the United States could become the world's largest LNG exporter would have sounded fantastic. And yet, that’s exactly what happened last year: The US exported as much LNG as Qatar did in 2022—more than 81 billion cubic meters. And in the new year, American suppliers are going to export even more. But the LNG boom may end sooner than many expect. Irina Slav, columnist for the OilPrice resource, writes about the reasons for this.

The lion's share of the gas liquefied at terminals in the Gulf of Mexico last year went to Europe, which was suddenly thrown off the rocky path to a future without fossil fuels by the conflict in Ukraine and its own reaction to this event. The sanctions have led to a decrease in Russia's energy supplies. It is in the resulting supply vacuum that the US shale players face a dilemma.

The year 2022 ended for the Old World with full gas supply, but, having stopped receiving gas from the Russian Federation, the Europeans are still using Russian gas, which was previously stored, which will not happen in 2023. Even with even more intensive US imports, fuel shortages will be significant. In other words, overseas exporters will have to invest additional funds to increase production, that is, in exploration and drilling, pumping to port infrastructure and liquefaction. Of course, mining companies driven by a thirst for profit will try to take advantage of the situation, develop the industry, but they will face losses.

As the expert writes, in the end, a shortage of energy resources cannot be avoided, as well as an increase in cost, which, in turn, will end in a drop in demand and the turning of new multibillion-dollar investments into ashes, as Europe will be forced to look for additional capacities to generate heat and electricity using renewable sources. and a decrease in the share of imports not only from the Russian Federation, but also from the USA. This will lead to the end of the shale boom, the observer concludes.

Photos used: freeportlng.com

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Offline zzdimk

zzdimk 5 January 2023 08: 59

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Not without meaning, but "there will be less snow next year due to the fact that this year it fell a lot and next year there will not be enough for everyone." Europe has Norway and Holland - it will bake, so they can increase production.
1. Offline Andrey Andreev_2
  
  Andrey Andreev_2 (Andrey Andreev) 5 January 2023 22: 28
  
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  I don’t know when such a warm winter was in Europe ... I myself am now in Cyprus, during the day +20 in the shade, at night 10-13 ... very comfortable! But in the yard on January 5))) Therefore, you should not guess on the coffee grounds. Europe will always survive, because it has a hell of a lot of money, Russia will also last without jamon... There is a war of survival. It is too early to draw conclusions and it is impossible to predict the future)))
2. Offline Expert_Analyst_Forecaster
  
  Expert_Analyst_Forecaster 6 January 2023 07: 07
  
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  Europe has Norway and Holland - it will bake, so they can increase production.
  
  They cannot increase. Holland has already put an end to it. And Norway is increasing production by crumbs. Moreover, the cost of production is growing significantly. Cheap gas only from the Arabs and Russia. In huge volumes.
  Norway, Holland, Great Britain is pah. little things.
Offline Sergey Latyshev

Sergey Latyshev (Serge) 5 January 2023 09: 14

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Scarecrows for the future.
In real life, if the price jumps, then shale and LNG become profitable. Well, there are no fools, they are already building up the logistics again and everything comes into balance.

Multibillion losses? fantasies of an author from NATO
1. Offline boriz
  
  boriz (boriz) 5 January 2023 17: 40
  
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  Scarecrows for the future.
  
  For whom? For Europe, deindustrialization due to rising energy prices is a harsh reality.
  And in the United States, the most profitable gas fields were used initially, Biden did not give money to help in exploration for oil and gas (the green agenda rules!). Infrastructure (pipelines and new wells) was therefore not developed.
Offline Fizik13

Fizik13 (Alexey) 5 January 2023 16: 01

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Somehow this reminds me of the shale oil epic.
Soon we will forget about American LNG.
And Russian gas will ALWAYS be!
1. Offline Name LastName
  
  Name LastName (name last name) 5 January 2023 19: 09
  
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  But not for everyone ...
Offline Alternatives

Alternatives (Alexander) 5 January 2023 16: 28

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Of course! And Europe will freeze!
Offline m.cempbell

m.cempbell (Anton) 5 January 2023 16: 51

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Americans are not stupid. If they pour many, many ... yards of money into production for the sake of the EU, then they will impose such contracts on the latter, in comparison with which spot prices will still seem like a fairy tale
1. Offline Valera75
  
  Valera75 (Valery) 5 January 2023 18: 16
  
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  Quote: m.cempbell
  Americans are not stupid. If they pour many, many ... yards of money into production for the sake of the EU, then they will impose such contracts on the latter, in comparison with which spot prices will still seem like a fairy tale
  
  It’s easy. Somehow, everyone has been burying shale gas from the Americans for a dozen years, and everything is being mined and mined. When they run out, they will destroy the "oil and gas" country and take all the resources for themselves. Iraq and Syria will seem like a trifle if the Anglo-Saxons are pressed with energy resources. Looking at them how, for their own benefit, they throw entire countries into the meat grinder of war there, it’s somehow strange to be surprised at their cruelty.
Offline vlad127490

vlad127490 (Vlad Gor) 5 January 2023 18: 36

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Why is the fate of the US and Europe of all hacks more concerned than the Russian Federation? You better write that as a result of the loss of the North American and European markets, Russia has lost more than 50% of its income.
1. Offline svit55
  
  svit55 (Sergey Valentinovich) 5 January 2023 20: 06
  
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  Not this way. Write about the complete gasification of the Russian Federation. That's when we laugh from Europe.
  1. Offline Expert_Analyst_Forecaster
    
    Expert_Analyst_Forecaster 6 January 2023 06: 57
    
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    Write about the complete gasification of the Russian Federation
    
    Well, if you personally pay for the laying of many thousands of kilometers of pipes to all our settlements (especially beyond the Urals), then we will get a complete gasification of Russia. So you don't care about the price. Like all dreamers-idealists.
    1. Online Vladimir Tuzakov
      
      Vladimir Tuzakov (Vladimir Tuzakov) 6 January 2023 20: 08
      
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      According to US LNG, the extraction of shale oil and gas greatly pollutes the depths, the Americans profit today, and tomorrow even though the grass does not grow. European countries, where shale hydrocarbons can also be mined, have banned such mining. On the problems of the Russian Federation, it is unprofitable to lay hundreds of kilometers of pipes in sparsely populated areas, but it is still necessary to import LNG where there are no forests. Where there is forest, local gasification of second-rate forests with local gas pipelines is possible. Individual solutions for each case. Only loans and jobs without theft are needed, and it's time to reach the standard of living of the 21st century ..
2. Offline Vladimir1155
  
  Vladimir1155 (Vladimir) 5 January 2023 23: 20
  
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  since the Russian Federation has ceased to pay a slave colonial tribute to the West (budget rule), then the income of Russia from a decrease in gas exports has not decreased
3. Offline Expert_Analyst_Forecaster
  
  Expert_Analyst_Forecaster 6 January 2023 07: 01
  
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  as a result of the loss of the North American and European markets, Russia lost more than 50% of its revenues
  
  Can you give more details? In numbers. Especially about the North American market.
  In principle, I agree with you. We have lost the European market.
  But you don’t need to say about 50% of income.
  As the humanists have already pulled up, who do not understand anything in numbers, but with rare persistence insert them into their statements.
  1. The comment was deleted.
Offline Constantine N

Constantine N (Constantin N) 5 January 2023 20: 10

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there is also the possibility that the US is preparing to switch to new technologies for energy production and trying to get the maximum benefit from fossil resources that will become obsolete.
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  Ksv (Sergei) 6 January 2023 12: 56
  
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  Fusion fusion finally learned to do in a glass of water? Or is Helium-3 transported from the Moon by teleportation? Or a huge leap in methane and hydrogen production?
  I also thought that they had learned to do something and therefore decided to bring down our economy before their leap forward, but so far this is not the case !!!
Online ksa

ksa 5 January 2023 20: 34

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Demand for hydrocarbons is growing.
The cost of hydrocarbons is rising.
The hegemons are beginning to understand their dependence on hydrocarbon producers.
The hegemons are trying to get rid of this dependence by jumping on the energy of the sun and wind.
Hegemons don't get shit.
The hegemon understands that the only way out is to dismember Russia and seize its hydrocarbon sources.
Offline Expert_Analyst_Forecaster

Expert_Analyst_Forecaster 6 January 2023 06: 48

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The US plan to sell its expensive gas dearly has been successfully executed.
And you can write a million words that someday the States will suffer huge losses.
Europe and Russia have lost the gas war to the US and we are being asked to harbor foolish hopes that America will have bad times.
Offline Expert_Analyst_Forecaster

Expert_Analyst_Forecaster 6 January 2023 06: 53

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Quote from ksa
The hegemon understands that the only way out is to dismember Russia and seize its hydrocarbon sources.

The US has enough of its own gas, as well as oil, coal, etc.
Europe, this...let it try to grab cheap resources in Russia. But they have short arms.
But Japan is a serious danger. And there is also South Korea. And China cannot be ruled out.
Our dreamers list China as an ally on the basis that they so desire. But China doesn't care about Russian dreamers. He has his own interests.
Offline Sam Rimer

Sam Rimer (Sam Rimer) 6 January 2023 08: 42

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Quote: Expert_Analyst_Forecaster
Our dreamers list China as an ally on the basis that they so desire. But China doesn't care about Russian dreamers. He has his own interests.

Russia is a cash cow for China. Milk is good. There will be no milk, then they will kill for meat.
1. Offline Expert_Analyst_Forecaster
  
  Expert_Analyst_Forecaster 6 January 2023 09: 34
  
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  There will be no milk, then they will kill for meat.
  
  I don't think that's the question. China is careful. So don't rush to score. It will simply try to have as many (and longer) advantages from trade with Russia as possible. At this stage, the worse Russia is, the better for China. So it does not even smell of allied relations.
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Offline Vilture

Vilture (Vilture) 6 January 2023 17: 37

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The article is devoid of logic, the demand for LNG will grow, so the sellers will lose money?? The reasons are completely meaningless. Will they invest in mining for nothing, because in a couple of years demand will fall??
This is called the expenses that they will pay back in a year.
Even if you find money on the road, you will need the costs of transporting it to the bank, or depreciation of sneakers.
Offline Igor E

Igor E (Igor Erokhin) 6 January 2023 19: 02

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Everyone has their own plan. The US is creating an aggressive buffer from Finland to Turkey to prevent any energy flows from Russia from reaching the EU. This is now clear. In order to pay more for oil and gas, Europe will simply increase the exploitation of its labor force and lower its standard of living. It's okay - look, Japan did it - it's incredibly hard to work and the standard of living is very excellent. And our plan is to break through this buffer wherever else is possible: through Turkey and/or Ukraine, through the Baltic Sea via pipelines. Let's see whose plan wins
Offline Valera75

Valera75 (Valery) 7 January 2023 04: 22

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Quote from Constantin N.
there is still the option that the United States is preparing to switch to new technologies for energy production and is trying to get the maximum benefit from fossil resources that will become unnecessary

Well, they have already switched to green energy, and now they are starting to open coal mines in a panic, they decided not to close the nuclear power plant. Hydrogen? So far, no breakthroughs are visible here at all, and I think for now this matter has been shelved
Offline Yuriy_8

Yuriy_8 (Yuri Ryzhkov) 8 January 2023 04: 07

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Europe clearly showed its irrationalism in relation to Russia, it broke off all relations with Russia, despite the obvious economic harm to itself, in the hope that Russia would be even worse than it was. It is obvious that both of these subjects, Europe and Russia, will be worse off. But the US will be better. To the delight of the ruling Jewish elite of the United States, because it equally hates both Russia and Europe for their anti-Semitic past. So the US State Department in the face, Blinken, Nuland, Yemen, etc. not without reason drinking champagne this New Year!