New Record for LNG Feed Gas as Markets Approach Potential Glut

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)

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Summary

The amount of natural gas feeding U.S. export terminals set a record last week. More developments are coming from the Gulf Coast to Alaska, though the market may be approaching a glut.

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Yet Another Feed Gas Record

U.S. terminals delivering liquefied natural gas (LNG) to foreign economies were in overdrive during the first week of December, with feed gas setting a record amid concerns of a supply-side overhang, data show.

IIR Energy reported Friday in NATGAS TODAY that the amount of feed gas running to the eight operational LNG export terminals set a record of 19.3 billion cubic feet (Bcf), besting the previous record set only in late November.

Deliveries to the Corpus Christi, Texas, terminal, operated by Cheniere Energy (Houston, Texas), saw deliveries at 2.4 billion cubic feet per day (Bcf/d) over the two days ending Friday, a gain of 0.8 Bcf/d from early in the week.

Operated by Venture Global (Arlington, Virginia), the Sabine Pass, Louisiana, terminal, the largest export terminal by volume, averaged 5.1 Bcf/d last week, running some 114% above nameplate capacity.

Levels of 19 Bcf, meanwhile, are well above forecasts from the federal government. The U.S. Energy Information Administration (EIA), part of the Department of Energy, forecasts an average of 14.9 Bcf/d for 2025. Should all terminals fire at their design capacities year-round, feedstock would be around 18.5 Bcf/d, according to data from IIR Energy.

The U.S. is already the world leader in LNG deliveries, helping to support a European economy looking to do away with Russian supplies since the start of the war in Ukraine in 2022. Since his return to office in January, President Donald Trump has pressed for LNG expansions as part of a broader effort to prop up the domestic fossil fuels industry.

More in the Works

Last week, Glenfarne Group (New York, New York) made several announcements that would give the president something to brag about. An offtake agreement with Australia's Macquarie Group for the proposed Texas LNG project puts the facility slated for Brownsville, Texas, one step closer to a final investment decision (FID).

For its proposed Alaska facility, U.S. Interior Secretary Doug Burgum and other federal delegates were on hand for a signing ceremony between Glenfarne and services firm Baker Hughes (Houston), which will provide refrigerant compressors for the coastal terminal and power-generation equipment for North Slope operations.

"Alaska LNG has the potential to be one of the most significant energy infrastructure projects in our nation's history," said U.S. Energy Secretary Chris Wright.

In emerging developments, Glenfarne now says Alaska LNG will proceed along "two financially independent phases." The first phase involves the construction of an 807-mile, 42-inch pipeline to transport natural gas from the North Slope to a coastal export facility.

Engineering firm Worley (Sydney, Australia) is behind the construction details as well as preparing a cost assessment of the pipeline.

The second phase will consist of the terminal itself, slated to deliver as much as 20 million tonnes per annum (MTPA) of gas in the liquid form. A final investment decision is expected by late 2026.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can learn more about Alaska LNG--including capacities, investment values and necessary equipment--from a list of detailed project reports.

Too Much of a Good Thing?

Combined with new facilities expected along the Gulf Coast, the U.S. LNG sector is in the midst of a growth spurt. But there may be some issues ahead as LNG exports drag on domestic supplies, raising the price of natural gas for U.S. consumers.

The International Energy Agency (IEA) said as much as 1 trillion cubic feet per year is expected annually to 2030, possibly leading to a supply glut that would discourage investments.

"The pace and scale of this buildout could shift due to construction delays, new project FIDs, progress on already approved but currently inactive developments, and other uncertainties," the EIA said.

Describing the pace of growth in the U.S. LNG sector as "mindboggling," Reuters on Thursday reported that profit margins for the industry may be on the decline as the industry builds up.

Key Takeaways

• Successive records set in U.S. LNG sector.
• Glenfarne in overdrive with new developments.
• Federal officials on hand for Alaskan announcements.

By the Numbers

• 19.3 billion cubic feet: A new record for feed gas
• 14.9 billion cubic per day: The expected average for 2025
• 1 trillion cubic feet: The annual amount of natural gas expected to 2030

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).