By Joe A. Cortez, Trade Advisor, Braumiller Consulting Group
Lately, domestic natural gas producing companies have started to export more natural gas to Canada and Mexico. Before 2000, the United States exported relatively small volumes of natural gas and mostly by pipeline to Mexico and Canada. Total annual exports have generally increased each year since 2000 as increases in U.S. natural gas production contributed to lower natural gas prices and the competitiveness of U.S. natural gas in international markets.
In 2017, total annual natural gas exports were 3.17 Trillion cubic feet (Tcf) —the highest on record, as exports were larger than imports for the first time in 60 years, and the United States became a net exporter of natural gas.
It is no wonder that domestic natural gas producers have started to export. So, what are the responsibilities of these new exporters who ship via a pipeline? The have the same responsibilities as any other export. The owner of the natural gas is usually the USPPI. Normally, they are the U.S. entity that receives the order from the foreign buyer. It is their responsibility to ensure that the shipment of natural gas gets reported through the Automated Export System (AES). Unless it is a routed export transaction, however in my experience, routed exports are rare via pipeline.
However, there are some differences in reporting the data items, below is a sample of the differences:
USPPI Address Information: Address Line 1 (Street Address): The name of the U.S. pipeline that carries the natural gas into Canada or Mexico. City, State and Postal Code: The city, state, and zip code of the U.S. city nearest the border crossing of the pipeline.
Port of Export– The nearest U.S. Customs and Border Protection port to the actual border crossing location that is valid for a fixed mode of transportation. “Fixed” refers to fixed transport installations
such as pipelines.
Ultimate Consignee: Company Information and Address The person, party, or designee that is located in Canada or Mexico that actually receives the export shipment. This party may be the end user or the Foreign Principal Party in Interest (FPPI). If the Ultimate Consignee is not known, the name and address of the Hub in Canada or Mexico closest to the border crossing may be reported. Then you have the question of who is the carrier? It is the owner of the pipeline
State of Origin: The State where the Natural Gas leaves the United States.
Departure Date: The following 2 options may be used to report the Date of Export:
1) Shipments may be filed throughout the month. The date of export should be reported
as the actual date of export.
2) Shipments made throughout a given month may be consolidated and reported as one
shipment within four calendars days of the end of the month. * The date of export
shall be reported as the last calendar date of that month.
* Note, consolidated shipments must be shipped from the same USPPI to the same
Ultimate Consignee (as defined below) within the same departure month and through
the same pipeline.
Sources: The Department of Energy, U.S. Census Bureau