Venture Global's Plaquemines LNG Receiving Gas, no LNG Production Yet

U.S. LNG was poised for a year of massive growth in 2024, with new terminals and expansions set to cause feedgas to rise and commercial success in the years following Russia’s 2022 invasion of Ukraine set to spur further LNG project development. Instead, construction delays have pushed projects back and feedgas in the past three months has averaged about 500 MMcf/d less than the same period last year. Meanwhile, the Biden administration’s pause on non-free trade (FTA) export licenses, lengthy delays to the Federal Energy Regulatory Commission (FERC) authorization process and the resulting legal challenges to both have brought project development to a near-standstill. In today’s RBN blog, we look at current U.S. LNG feedgas demand and how construction delays have shifted expectations for the next few years. 

Feedgas demand at U.S. LNG export terminals has climbed 1.3 Bcf/d, or ~40%, in just three months to an average 4.4 Bcf/d in December to date and hit an all-time single-day high of over 4.6 Bcf/d last Tuesday. The big jump in demand came as U.S. Gulf Coast LNG operators have begun commissioning three new liquefaction trains, including the initial trains at two new export terminals. At the same time, pipeline expansions targeting both existing and newly active terminals have been completed to meet that demand. How are the new trains being supplied and what’s the effect on gas flows? Today’s blog takes a closer look at recent changes in liquefaction and feedgas delivery capacity and their effect on feedgas flows, starting with Cheniere Energy’s Sabine Pass Liquefaction.

After a roller coaster over the past year, U.S. LNG feedgas demand has been holding steady at record levels of around 11 Bcf/d for nearly a month now, with the exception of a few days due to pipeline maintenance. With Train 3 at Cheniere Energy’s Corpus Christi Liquefaction facility online and price spreads to global markets favorable for U.S. exports, that’s where it’s likely to stay, except for maintenance periods — at least until new liquefaction trains start commissioning later this year. Two Louisiana projects, Venture Global’s new Calcasieu Pass facility and the sixth train at Cheniere’s existing Sabine Pass terminal, have both indicated that they will begin exporting commissioning cargoes by year’s end — ahead of their originally proposed construction schedules — a prospect that could boost Gulf Coast feedgas demand to even greater heights by the fourth quarter of 2021. In today’s blog, we wrap up this short series with a detailed look at the two projects and implications for LNG feedgas demand this year.