Amid Growing Demand, U.S. LNG Export Outlook Remains Stable

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--With depleted storage in the European economy and a surge in demand from the likes of India, data on potential exports of liquefied natural gas (LNG) from the U.S. show no change in future growth.

The Energy Information Administration (EIA), the statistical arm of the Energy Department, outlined its latest forecast for prices, production and demand in its Short-Term Energy Outlook report for February.

Already the world leader in exports of LNG, the EIA is expecting total output to expand by 16% from year-ago levels to an average of 14 billion cubic feet per day (Bcf/d) in 2025. That's forecast to increase by another 14% next year to reach 16 Bcf/d on average.

Those forecasts, however, are unchanged from EIA's report in January, and follows the suspension of an order issued by former President Joe Biden that paused new terminals for LNG exports. Biden pressed the pause button while the administration studied the potential for methane emissions along the supply chain.

According to Reuters, Energy Transfer LP (NYSE:ET) (Dallas, Texas) plans to make a final investment decision (FID) on an LNG export facility in Lake Charles, Louisiana, by the fourth quarter, adding to the growing queue of future projects.

Data from IIR Energy show four terminals under construction along the U.S. Gulf Coast that could add to the nation's export potential:

• Trains 1 through 7 for Corpus Christi Stage III in Texas; see project report
• Trains 1, 2 and 3 for Golden Pass in Texas; see project reports for Train 1, Train 2 and Train 3
• Trains 19 through 36 for Plaquemines in Louisiana; see project reports for trains 19 through 27 and trains 28 through 36
• Trains 1 and 2 at Port Arthur LNG in Port Arthur, Texas; see project reports for Train 1 and Train 2

The eight functioning LNG terminals were operating at about 91% of their peak capacity on Tuesday, combining for about 15.7 Bcf/d in LNG. Total natural gas production was down by about 1.2 Bcf/d, presumably due to the result of a cold weather snap across much of North America.

Demand strains during the winter already are high, and increases in LNG exports from the U.S. could exacerbate the domestic situation. Total U.S. natural gas production, meanwhile, is expected to increase 0.8% from year-ago levels, compared to an expected 2.8% increase in crude oil production.

That could make for a tight global market. Gas storage levels in Europe are depleted. France, which typically takes in considerable volumes of LNG sourced from U.S. shale basins, has underground storage that's only about 30% full.

Major economies such as India are expecting a surge in demand, straining a global capacity that in 2022 started to do without the abundant supplies from Russia due to sanctions related to the war in Ukraine.

Natural gas prices, meanwhile, were largely suppressed last year due to lackluster demand. In its February market report, the EIA is expecting an uptick in market prices, however.

Henry Hub, the U.S. benchmark for the price of natural gas, averaged $2.20 per million British thermal units last year. It's expected to be about $3.80 this year, and $4.20 by 2026.

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).