New U.S. LNG export projects battling rising labor and equipment costs and/or financing woes have one more thing to worry about that the first wave of projects didn’t: ensuring the feedgas supply will be there when they need it. Bottlenecks have already developed for moving natural gas volumes to the Louisiana coast, where the bulk of future export capacity will be sited. As more liquefaction capacity is built out and more export projects are greenlighted, a lot more pipeline capacity will be needed to move feedgas supply from the Haynesville and other supply basins into southern Louisiana and across the last mile to the terminals. In today’s RBN blog, we conclude our roundup of pipeline expansions in the Bayou State that would help ease transportation constraints and balance the market, this time with a look at announced-but-yet-to-be sanctioned greenfield pipeline expansions, along with an update on their associated export projects.
Gotta Get Over
The U.S. won’t add new LNG export capacity this year for the first time since it became an exporter in 2016. But that lull is not going to last long. At least five facilities are under construction and due for completion in the next few years, several other expansions were recently sanctioned, and there are more final investment decisions (FIDs) on the way. With export development expected to accelerate in the coming years, the race to debottleneck feedgas pipeline routes is on. More natural gas pipeline capacity will be needed, particularly for moving gas supply to the Louisiana coast, where the bulk of new liquefaction will be sited. In today’s RBN blog, we resume our series on the pipeline expansions targeting LNG export demand, this time highlighting TC Energy’s Gillis Access Project and how it fits into the Louisiana LNG market picture.
Hardly a day goes by without news related to U.S. LNG export capacity expansions, whether it’s upstream supply deals, offtake agreements or liquefaction capacity announcements. One project is nearing commercialization, another five are under construction and due for completion in the next few years, still others are fully or almost-fully subscribed and will be officially sanctioned any day now, and the announcements keep coming. Just days ago, Venture Global reached a final investment decision (FID) for the second phase of its Plaquemines LNG project. With export development accelerating in the coming years, more natural gas pipeline capacity will be needed, particularly for moving gas supply to the Louisiana coast, where the bulk of the new capacity will be sited. In today’s RBN blog, we continue our series highlighting the pipeline expansions targeting LNG export demand, this time focusing on projects moving gas to southeastern Louisiana, including those designed to deliver feedgas to Venture Global’s under-construction Plaquemines LNG project.
As U.S. LNG export project development accelerates in the coming years, a lot more natural gas pipeline capacity will be needed to supply the numerous liquefaction facilities vying for a piece of the global gas market pie. That’s particularly true for a small stretch of the Gulf Coast from the Sabine River on the Texas-Louisiana border to the Calcasieu Pass Ship Channel — where the bulk of planned export capacity additions are concentrated — even as transportation bottlenecks are emerging for getting natural gas supply to the area. To address the growing demand, a number of pipeline expansions are planned or proposed to bring more supply into the region or deliver feedgas across the “last mile” to these multibillion-dollar facilities. In today’s RBN blog, we continue our series highlighting some of these LNG-related pipeline projects, this time focusing on ones aiming to feed exports out of southwestern Louisiana.
LNG exports will be the biggest driver of demand growth for the Lower 48 natural gas market over the next five years. After a year of oversupply in 2023, export capacity additions will help to balance the market and support gas prices in 2024 as the glut spills over into next year. Beyond 2024, higher export volumes will lead to tighter balances and price spikes. As supply struggles to keep up with new export capacity, the timing of pipeline expansions will be critical for balancing the market. The bulk of new LNG export projects are sited along a small stretch of the Texas-Louisiana coastline and more pipeline capacity will be needed to move incremental feedgas into this area and across the “last mile” to the facilities. In today’s RBN blog, we begin a series delving into the planned pipeline expansions lining up to serve LNG demand along the Gulf Coast.