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June 6, 2011

Re-exports of liquefied natural gas rose rapidly in early winter

Source: U.S. Energy Information Administration based on U.S. Department of Energy, Office of Fossil Energy data
Note: no re-export volumes at Cameron as of March 2011.

Re-exports of liquefied natural gas (LNG) occur when foreign LNG shipments are offloaded into above-ground U.S. storage tanks located on-site at the terminals and then subsequently reloaded onto tankers for delivery to other countries. Re-exports of foreign sourced LNG from U.S. LNG terminals exceeded 12 billion cubic feet (Bcf) in January 2011, equivalent to about 30% of U.S. LNG import volumes during that month, and the highest volume since the start of re-export service in December 2009. There are currently three U.S. LNG terminals that have been granted Federal approval to re-export LNG: Freeport in Texas, and Sabine Pass and (recently approved) Cameron in Louisiana.

U.S. LNG imports and deliveries from terminals to the domestic market are down due to increasing domestic natural gas production and average U.S. spot natural gas prices that are well below levels in other major natural gas markets with the capability to import LNG.

Typically, low utilization at these terminals has created available LNG storage capacity in the terminals' storage tanks. Re-exportation of LNG lets marketers and suppliers store gas, while waiting for price signals before delivering their LNG to the higher-paying markets in Asia, Europe, and South America.