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Gotta Get Over - The Race to Debottleneck U.S. LNG Feedgas Routes

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.

Before we dive into our discussion about recently completed and planned pipeline projects along the Gulf Coast, let’s quickly review the LNG export projects that are driving their development. Figure 1 summarizes the LNG export facilities already operating (green diamonds) in the region, including ones with planned expansions, along with greenfield projects that fall into one of three categories: projects that are already greenlighted and under construction, or in the case of Calcasieu Pass, commissioning (blue diamonds); projects that are likely to reach final investment decisions (FID) within a year (dark orange diamonds); and projects that are probable for reaching FID in the next 1-3 years (lighter orange diamonds). Note that these are just a subset of the nearly 30 LNG export projects we track in our LNG Voyager report that are jockeying for a piece of the global gas market. For the purposes of this blog series, however, we’ll focus on the projects that are well on their way or have significant momentum toward moving ahead.

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