US LNG Project Approvals On Track To New Record Volumes Ship’s crew

Reuters

NEW YORK, June 23 (Reuters) – US liquefied natural gas (LNG) developers are on track to approve three export projects capable of processing 5.1 billion cubic feet per day (bcfd) of gas in the first half of the year, a record volume for new LNG projects every year.

The US became the world’s largest LNG producer by installed capacity in 2022, thanks to a boom in LNG plant construction and a decade of rapid shale gas discoveries. US LNG exports are expected to reach 12.1 bcf this year and 12.7 bcf next year.

The recent approvals are reducing the backlog of projects seeking financial backing and clients willing to sign long-term contracts. Analysts assume that the demand for the fuel will ensure further approvals this year.

“We expect global LNG demand to grow from 399 million tonnes in 2022 to 627 million tonnes in 2035, an increase of more than 50%,” said Michael Stoppard, head of global gas strategy at the data provider S&P Global Commodity Insights.

US LNG developers have already approved construction of two projects this year: the second 1.2 bcfd phase of Venture Global LNG’s Plaquemines in Louisiana and Sempra Energy’s 1.8 bcfd Port Arthur in Texas .

NextDecade Corp said it expects to give the green light to the first 2.1 bcfd phase of its Rio Grande LNG project in Brownsville, Texas by the end of the month. The first production could take place in 2027, it said.

MOST VOLUMES

Final Investment Decisions (FIDs) allow companies to begin major construction projects after construction and financing contracts have been signed. It typically takes three to five years for new plants to produce their first LNG.

The combined gas volumes of 5.1 bcfd are the highest US approved volumes in a year since 2014, when three projects capable of processing 4.9 bcfd received financial approvals. The seven currently operating US export facilities can convert about 13.8 billion cubic feet of gas per day into LNG.

Several other LNG export projects are hoping to attract enough customers this year to get the green light – some have been in development for years.

According to analysts, two of the frontrunners are the first 0.4 bcfd phase of Delfin Midstream’s offshore Louisiana project and the first 1.3 bcfd phase of Venture Global’s Calcasieu Pass 2 (CP2) project in Louisiana.

Four LNG plants are currently under construction in the US: QatarEnergy’s 2.4 bcfd joint venture Golden Pass and Exxon Mobil Corp in Texas, Venture Global’s 2.9 bcfd LNG plant Plaquemines, 1 .5 bcfd LNG expansion Corpus Christi by Cheniere Energy Inc and Port Arthur by Sempra.

If these four become operational from 2024 to 2028, the US LNG export capacity will increase to 15.3 billion cubic feet (bcfd) next year and 22.3 billion cubic feet (bcfd) in 2028.

Current LNG capacity is 10.1 bcfd in Qatar and 11.5 bcfd in Australia. With the North Field expansion around 2025, the number is expected to rise to around 14.3 bcfd in Qatar and with the Pluto expansion around 2026 to around 12.2 bcfd in Australia.

(Reporting by Scott DiSavino in New York and Marwa Rashad in London; Editing by Conor Humphries)

(c) Copyright Thomson Reuters 2023.

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