By Ryan Russell, Global Energy Specialist, U.S. Commercial Service

Growing populations, increased industrial and economic activity, and rising incomes are driving greater demand for energy around the world. As countries seek affordable and environmentally sustainable energy, natural gas has become a more popular fuel source not only here in the United States, but in many of our partner countries around the world. With the shale revolution in the United States, U.S. and local Pennsylvania companies are well-positioned to take advantage of growing global energy demand to drive local economic development.

Liquefied Natural Gas (LNG) has become a hot topic over the past several years. LNG is natural gas that has been cooled to a liquid state, which reduces the volume by 600-to-1, thus facilitating shipment and storage. Liquefying gas allows for transportation of the fuel between locations not connected by pipeline. LNG is then re-gasified, or returned to its gaseous state, at a receiving import terminal and distributed through a country’s pipeline system to be delivered to end users for power generation, heating, and as a feedstock for petrochemical processes.

Since initiating LNG exports in 2016, the United States has increasingly delivered LNG cargoes to customers in Europe, Asia, Africa, the Middle East, the Americas, and the Caribbean. The same two-year period has coincided with growing international demand. The number of countries importing LNG grew to 40 last year, and worldwide imports have increased by 18 percent. As a result, the United States became a net exporter of natural gas in 2017 for the first time since 1957!

Asia has been the top destination for U.S. LNG exports. Approximately 40% of U.S. cargoes shipped over the last two years went to Japan, China, and South Korea, and exports to Asia are expected to remain the largest area of growth in the coming years. As additional infrastructure comes online, U.S. LNG exporters and gas producers are in prime position to meet our international partners’ growing energy demand.

Japan is the world’s largest buyer of LNG and will continue to rely on imports to meet its demand for secure, inexpensive, and relatively clean energy. Following the first long-term contracted delivery of U.S. LNG in early 2018, the U.S. Commercial Service office in Japan believes U.S. LNG exporters are positioned to capture a significant share of the future Japanese market as their utilities seek to diversify their supply and existing long-term contracts with foreign suppliers expire over the coming years.

India has announced plans to grow the share of LNG in its energy mix from 6.5% to 15% by 2022 to meet ongoing demands for energy and fertilizer feedstock. Doing so will require the country to ramp up significantly its imports of LNG and plans to add 11 new LNG receiving terminals to its current fleet of four. In addition to the fuel supply opportunities, the announced infrastructure development presents opport, LNGnities for U.S. equipment, technologies, and expertise.

South Korea overtook Mexico as the largest importer of U.S. LNG in late 2018, in an effort to diversify its fuel sources. Korean utilities and customers imported 110 billion cubic feet of natural gas in the first six months of 2018, which accounted for more than 22% of its overall imports. This was after U.S. LNG exports had already increased 13-fold between 2016 and 2017. Opportunities for U.S. firms will continue as additional private Korean utilities join State-backed Korea Gas Company in purchasing LNG from U.S. suppliers.

These data points and examples clearly demonstrate opportunities for local Pennsylvania gas producers (who often sell their gas to separate LNG exporters for shipment overseas). They also highlight opportunities for the local and national gas industry more broadly, as the need for U.S. expertise, services, and related equipment rise.

As countries around the world develop LNG infrastructure and gas-fired power generation, Pennsylvania companies will be able to provide much-needed U.S. innovation and know-how. From the engineering, procurement, and construction (EPC) companies that design and build the liquefaction plants, the equipment and material providers that supply products for their construction, to the service providers that can assist with technical and feasibility studies, environmental impact statements, and shipping and logistics, among other services, local firms are perfecting and providing the cutting-edge technologies that will be needed overseas.

The U.S. government is committed to supporting the continued international growth of American energy and energy technologies. As the export promotion agency within the government, the U.S. Commercial Service, part of the Department of Commerce’s International Trade Administration, works daily to connect U.S. exporters with partners and buyers overseas.

Our local office in Pittsburgh is your entry point into our global network of trade professionals ready to connect you to these global opportunities, find your next customer, and speed your entry into the market by providing counseling, customized matchmaking services, actionable market intelligence, and commercial diplomacy and advocacy. We stand ready to assist local companies access the growing opportunities in global LNG and energy demand and look forward to fueling Pennsylvania’s export growth.

Ryan Russell is a Global Energy Specialist with the U.S. Commercial Service’s Pittsburgh office. He can be reached at ryan.russell@trade.gov or (412) 644-2817.