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Shale Revolution 3.0: US Exports Gas To The Middle East

Ed Crooks, Financial Times

For the US to sell gas to the energy-rich Middle East might seem like sending coal to Newcastle, but it has started to happen as the American shale revolution upends the global flows of resources.

The Cheniere Energy LNG plant at Sabine Pass USA. Image courtesy Bechtel Engineering.

Cheniere Energy’s LNG plant at Sabine Pass

Two cargoes of US liquefied natural gas from Cheniere Energy’s Sabine Pass plant in Louisiana have been delivered to Kuwait and Dubai in recent months to meet the rapidly growing demand for energy.

This reversal of the well-established flows of hydrocarbons from the Middle East to the US reflects the boom in American gas production caused by the development of previously uncommercial shale reserves, and the soaring demand for energy in economies from the Gulf to north Africa.

“We’re in a time of huge change in LNG shipping routes,” said Ted Michael of Genscape, a market data provider. “The old order is being overturned, and we haven’t seen the dust settle yet.”

The Sabine Pass plant shipped its first cargo in February, and has already sent LNG to seven countries: Argentina, Chile, Brazil, India and Portugal, as well as Dubai and Kuwait.

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Many Middle Eastern countries have large gas resources, but have not had the investment they need to bring their reserves into production. Countries with fast-growing economies and populations have been forced to took to gas imports for power generation and industrial uses.

Their rising demand for gas coincides with a wave of additional supply reaching world markets as new LNG export projects in Australia and the US come into production.