Projects

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.

The incredible growth in U.S. LNG export capacity over the past few years has been facilitated by a mostly predictable federal permitting process. It may sometimes be slower than developers like and leave them more open to pushback at the state and local level, but LNG export projects that enter the federal permitting process with both the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) are generally granted their authorizations and export licenses. And once they have them, they’ve been able to hold onto them — until now. Both FERC and the DOE had been granting extensions to these permits as their authorization windows were closing, meaning that projects that were authorized a decade ago and still not online have retained their authorizations and export licenses. But with a DOE rule change announced April 21, the era of repeatedly renewing authorizations appears to be over. The DOE is sending a clear message to LNG developers: Get your project across the finish line in a timely manner or get out of the way and make space for someone who can. In today’s RBN blog, we take a closer look at the DOE rule change and its impact on LNG projects currently under development.

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.

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.

Over the past decade, floating LNG — for liquefying and shipping offshore natural gas supply — emerged as a promising technology that would enable development of smaller, more remote offshore gas fields around the world. But with a handful of projects now completed and in commercial operation, the challenges of financing, developing, and operating this relatively new technology are overshadowing its prospects. Of the more than 20 FLNG projects that have been proposed since 2007, only five have crossed the finish line and only two others have reached a favorable final investment decision (FID). Moreover, Shell’s Prelude FLNG offshore Northwest Australia — the largest of the existing FLNG facilities — has been dogged by issues since its commissioning in mid-2019, and the operator last week said the unit will not produce any more LNG cargoes this year, after being shut down since February for electrical problems. Today, we examine the headwinds facing FLNG projects.

Not long ago, the economics for U.S. LNG exports were practically a no-brainer. Despite the longer voyage times and the resulting higher shipping costs from Gulf Coast and East Coast ports to Europe and Asia — by far the biggest LNG consuming regions — LNG priced at the U.S.’s Henry Hub gas benchmark presented a competitive alternative to other global LNG supply, much of which is indexed to oil prices, which were higher then. But earlier this year, as oil prices collapsed, COVID-19 lockdowns decimated worldwide gas demand, and international gas prices plummeted, the decision to lift U.S. cargoes has become much more nuanced, and the commercial agreements to support the development of new liquefaction capacity are much harder — if not impossible — to come by. Today, we discuss highlights from RBN’s latest Drill Down Report on the impact of recent market events on U.S. export demand, capacity utilization, and new project development.

In observance of today’s holiday, we’ve given our writers a break and are revisiting a recently published blog on the U.S.’s shifting role in the global LNG market. If you didn’t read it then, this is your opportunity to see what you missed! Happy Labor Day!

Not long ago, the economics for U.S. LNG exports were practically a no-brainer. Despite the longer voyage times and the resulting higher shipping costs from Gulf Coast and East Coast ports to Europe and Asia — by far the biggest LNG consuming regions — LNG priced at the U.S.’s Henry Hub gas benchmark presented a competitive alternative to other global LNG supply, much of which is indexed to oil prices, which were higher then. But earlier this year, as oil prices collapsed, COVID-19 lockdowns decimated worldwide gas demand, and international gas prices plummeted, the decision to lift U.S. cargoes has become much more nuanced, and the commercial agreements to support the development of new liquefaction capacity are much harder — if not impossible — to come by. Today, we discuss highlights from RBN’s latest Drill Down Report on the impact of recent market events on U.S. export demand, capacity utilization, and new project development.