U.S. LNG has been on the fast track as new export capacity along the Texas and Louisiana Gulf Coast draws in increasing volumes of U.S. natural gas. The impact of that unprecedented buildout only intensified over the past several weeks with the war in Iran and its effects on Persian Gulf LNG.
The U.S. LNG industry has experienced monumental growth and there’s a hefty slate of additional projects somewhere along the path to a final investment decision, each with its own hurdles and timelines. Getting across that FID finish line can be quite arduous.
Russia’s 2022 invasion of Ukraine not only led to the demise of Russian pipeline gas supplies to Europe and caused prices to spike, but it also helped create new arbitrage opportunities for U.S. LNG shippers. In today’s RBN blog, we look at the different approaches the U.S. upstream has adopted in response.
Several large-scale LNG export projects have reached a final investment decision this year along the U.S. Gulf Coast, with most expected to start up between 2029 and 2031. They will be supported by new pipeline capacity to deliver natural gas from producing areas, but how and where will production increase to meet this new demand? In today’s RBN blog, we detail the movement of gas throughout Texas and Louisiana and highlight the key findings in the newest edition of our Arrow Model.
It’s well understood today that the U.S. natural gas market turned from potential domestic shortages to major LNG exports thanks to the Shale Revolution. What is not so well remembered is that the dramatic shift in the U.S. gas market wasn’t widely understood at the time and took several years to be accepted by the energy industry. In today’s RBN blog, we turn our attention to the beginnings of the Shale Revolution and how it allowed the U.S. to evolve into the world’s largest LNG exporter.
Ten years ago, U.S. exports of natural gas in the form of LNG were a footnote in the market. But that all changed in 2016. In February of that year, the first shipment of LNG from the Lower 48 states set sail when the vessel Asia Vision departed from Cheniere Energy's Sabine Pass export terminal in Louisiana. This was the culmination of a remarkable turnaround, not only at Sabine Pass, but for the U.S. natural gas market as a whole. Eight years earlier, Sabine Pass had been completed as an import terminal, as it was projected that the U.S. would face significant shortages of natural gas supplies. Shale turned that business model on its head.
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.
The Biden administration’s recently announced decision to pause further action on new LNG export permits for at least several months sent shockwaves through the industry and shook up expectations regarding which projects will be hurt by — or benefit from — the pause. As we’ll discuss in today’s RBN blog, the decision is likely to put a number of Gulf Coast LNG export projects (one of them a real giant) in limbo, set back a Mexican project that would depend on Permian and Eagle Ford gas, and boost a couple of projects up in Canada. Oh, and there’s this: The pause also may help two avowed enemies of the U.S.: Russia and Iran.
Venture Global reached a final investment decision (FID) on Plaquemines LNG Phase 1 in March 2022, making it the first new LNG project to get the green light post-COVID and kicking off a massive expansion period for U.S. LNG. In fact, more than 61 million tons per annum (MMtpa) of new U.S. LNG capacity has been given the go-ahead in the past 17 months, including the full 20-MMtpa Plaquemines LNG project from Venture Global, plus projects from Cheniere, Sempra and, most recently, NextDecade’s Rio Grande LNG. Even if no new LNG projects are sanctioned after this — which seems unlikely, given the progress seen on some pre-FID projects — the U.S. will have the capacity to export 167.5 MMtpa, or more than 22 Bcf/d, by later this decade. This unprecedented level of buildout continues to be dominated by our “Big Three” of U.S. LNG — Cheniere, Sempra and Venture Global — which not only already operate LNG export terminals in the U.S. and have projects currently under construction, but all still have more capacity under development and working toward eventual FIDs. In today’s RBN blog, we wrap up our series with a look at the newest member of the Big Three, Venture Global, its projects under development and the controversy surrounding the commissioning of Calcasieu Pass LNG.
Three new LNG export projects have reached a final investment decision (FID) in the past year or so — Venture Global’s Plaquemines LNG, Cheniere’s Corpus Christi Stage III expansion, and, most recently, Sempra’s Port Arthur LNG. What do these projects have in common? They are all being developed by companies that are already exporting North American LNG. These companies are arguably the “Big Three” of U.S. LNG, with Cheniere the reigning king, at least for now. Not only do they all have at least one operating terminal and at least one under construction, but all three have multiple pre-FID projects under development, including some that are decently close to FID. With their proven track records and deep balance sheets, being one of the big guys is a definite advantage when it comes to getting a project across the finish line. With a total of 43.5 MMtpa (5.8 Bcf/d) of capacity currently under construction and more than 100 MMtpa (13.4 Bcf/d) under development by these three, is there even room for anybody else? In today’s blog, we look at the pre-FID projects under development by the Big Three, starting with Sempra.
