The bulk of the second wave of U.S. LNG export projects will be situated along a small stretch of the Gulf Coast, from Port Arthur at the Texas-Louisiana border to the Mississippi River in southeastern Louisiana. Three of these projects — Golden Pass LNG, Port Arthur LNG and Plaquemines LNG — are under construction there and will add nearly 7 Bcf/d of new gas demand by 2028, and others could reach a final investment decision (FID) in the coming months or years. That’s prompted a frenzy of natural gas pipeline projects vying to serve this growing demand center, whether by moving incremental supply into the area or providing “last mile” delivery to the terminals. These pipeline expansions — and how well the incremental capacity, geography and timing align with liquefaction capacity additions — will drive the pace of overall gas demand growth and how the Lower 48 gas market will balance in the coming years. In today’s RBN blog, we discuss highlights from our new Drill Down Report detailing the slew of announced pipeline projects targeting LNG exports from the Port Arthur, TX/Louisiana region.
LNG exports will be the biggest driver of growth for natural gas demand in North America over the next five years. After a lull in export capacity additions in 2023, the next wave of liquefaction projects is expected to get underway in 2024, starting with the completion of Golden Pass LNG. Including Golden Pass, seven projects have reached FID and are under construction, while 28 others are in various stages of development and working toward the capacity and financial commitments to reach FID. While these projects span North America, importantly, the bulk of the new capacity is being planned or proposed for the U.S. Gulf Coast, and in particular, along a less-than-100-mile stretch of coastline in the northwestern corner of the Gulf of Mexico, between the Beaumont/Port Arthur area near the Texas-Louisiana border and the Mississippi River in southeastern Louisiana.
At full utilization of contracted capacity, feedgas demand at already-operational terminals in the Port Arthur/Louisiana region totals ~8 Bcf/d (gray bar in Figure 1), including ~4.5 Bcf/d at Cheniere Energy’s Sabine Pass LNG, ~2 Bcf/d at Sempra Energy’s Cameron LNG, and ~1.5 Bcf/d at Venture Global’s Calcasieu Pass LNG, which has been loading “commissioning” cargoes since the first quarter of 2022 but has yet to be commercialized. In addition, of the seven FID projects under construction currently, three are sited in this area (pink bars): Golden Pass LNG in the Beaumont/Port Arthur area, which is due to begin service in 2024; and two recently sanctioned greenfield facilities: Venture Global’s Plaquemines LNG on the Mississippi River in southeastern Louisiana and Sempra Energy’s Port Arthur LNG, also in the Port Arthur area. Altogether, these three projects represent nearly 7 Bcf/d of incremental feedgas demand that is due to come online in the next five years, bringing total feedgas demand in the region to nearly 15 Bcf/d by 2028 (maroon bar). And, beyond these greenlit projects, there are still more expansions moving toward FID, including some in the near term.
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