Three new U.S. LNG projects have reached a positive final investment decision this year: Venture Global’s CP2 Phase 2, Caturus’s Commonwealth LNG, and now, most recently, Delfin Midstream’s Delfin LNG, which will be the U.S.’s first floating LNG project.
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.
It’s shaping up to be an incredible year for U.S. LNG growth, with record levels of feedgas demand and exports along with progress on the regulatory front, as the Trump administration has cleared away hurdles that had previously stalled project development. Now, Cheniere Energy has announced a positive final investment decision (FID) on its Corpus Christi Midscale expansion. In today’s RBN blog, we take a closer look at the Midscale project and others that could move forward this year.
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.
LNG export projects looking to take a positive final investment decision (FID) need to sell a high proportion of their nameplate capacity under long-term contracts to ensure sufficient cash flows to underpin the project and obtain financing. U.S.-based projects (new and expansions) totaling more than 350 million tons per annum (MMtpa, 48.3 Bcf/) — against a current global market of 400 MMtpa (52.9 Bcf/d) — are vying for creditworthy offtakers from multiple markets in their pre-FID deliberations. The sense of urgency among project sponsors has been boosted by the Russia/Ukraine war and a potentially resurgent Chinese economy, both of which should promise a bright future for new projects. Plenty of those have reached FID in the last couple of years, but what is holding others back from taking the same step? In today’s RBN blog, we’ll look at some of the factors impacting those decisions and the long-term implications that flow from them.
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.
In the period between Russia’s invasion of Ukraine in February 2022 and the end of last year, LNG sales and purchase agreements (SPAs) totaling 47.23 million tons per annum (MMtpa; 6.3 Bcf/d) were signed between buyers and nine U.S. LNG projects under development. Of those, the projects that will ultimately secure a critical mass of reputable offtakers and achieve a final investment decision (FID) must also secure permitting and financing. Two project FIDs were taken in 2022: Cheniere’s Corpus Christi Stage III in Texas and Venture Global’s Plaquemines Phase 1 in Louisiana. Although two more FIDs have recently been announced — Plaquemines Phase 2 and Sempra’s Port Arthur Phase 1 — there can be a timing disconnect between the commitments LNG buyers are prepared to make and the ability of project sponsors to deliver on their plans. In today’s RBN blog, we focus on the increasingly important role of financing in the implementation of U.S. LNG projects and the challenges that project developers and sponsors face.
Thanks to a warm start to the season and low Asian demand for LNG, Europe has so far been able to stave off a worst-case scenario for natural gas supply this winter. Still, the European market is keeping a keen eye on the years ahead, when the continent will need to rely on new sources of LNG to meet demand and refill inventories with little chance of any Russian gas. The call for more LNG has ushered in a new wave of export-project development, with two U.S. projects reaching a positive final investment decision (FID) this year and LNG offtakers in Europe and elsewhere committing to an incredible 37 MMtpa (4.9 Bcf/d) of long-term contracts from pre-FID sites in North America. This momentum has revived a number of projects from the COVID-induced wasteland, including Sempra’s Port Arthur LNG. In today’s RBN blog, we continue our series on U.S. LNG projects by taking a closer look at Port Arthur, the one most likely to take FID next.
The world needs more LNG and the U.S. is answering that call. Two U.S. liquefaction projects, Venture Global’s Plaquemines LNG and Cheniere’s Corpus Christi Stage III, have already reached a final investment decision (FID) on a combined 23.3 MMtpa (3.1 Bcf/d) of export capacity, which will be online by mid-decade. But by the looks of it, we are just getting started. Next up could be NextDecade’s Rio Grande LNG, which has sold 75% of its first two trains’ capacity — enough to take FID, possibly by the end of the year. If it moves forward, not only will the project add another 10.8 MMtpa (1.43 Bcf/d) or more of export capacity to the Gulf Coast, it could also come with a new carbon capture and sequestration (CCS) facility, which has long been a selling point for the project. In today’s RBN blog, we continue our series on the U.S. LNG projects most likely to move forward, this time with a look at Rio Grande LNG.
The momentum for U.S. LNG right now is powerful. With Europe’s efforts to wean itself off Russian natural gas boosting long-term LNG demand and Asian consumption expected to grow even further, there has been a strong push for new LNG projects in North America. So far, that has helped propel two U.S. projects, Venture Global’s Plaquemines LNG and Cheniere’s Corpus Christi Stage III, to reach a final investment decision (FID). With these two projects getting a green light, total export capacity in the U.S. will be at least 130 MMtpa — or 17.3 Bcf/d — by mid-decade. That top-line export capacity could be much higher, however. There are currently eight U.S. Gulf Coast pre-FID projects with binding sales agreements, and a handful of projects that are fully subscribed in credible non-binding deals. If all those projects go forward, it would add a staggering 86 MMtpa (11.4 Bcf/d) of export capacity to the U.S., pushing the total toward 30 Bcf/d, or 225 MMtpa. In today’s RBN blog we look at U.S. LNG under development, how high export capacity could go, and the implications for the U.S. natural gas market.
