U.S. LNG Commitments Moving Higher and Higher

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The amount of feed gas running to U.S. liquefied natural gas (LNG) export terminals was below historic trends on Tuesday, just as major energy companies announce a series of long-term supply agreements.

IIR Energy in its daily natural gas report for Tuesday showed the total amount of feed gas running to the eight operational export terminals for LNG dipped just below 15 billion cubic feet, down about 1 billion from last week.

Data show three terminals - Cheniere Energy Incorporated's (Houston, Texas) Corpus Christi and Sabine Pass, and Freeport, operated by Freeport LNG (Houston) - operating below peak capacity. Of those, Freeport has been prone to issues with its power supplies. The plant was forced to close briefly in March, following a lightning strike.

Sabine Pass is the largest operational terminal in the United States, however, with a processing capacity of 4.5 billion cubic feet per day (Bcf/d). Feed gas as of Tuesday was closer to 3.8 Bcf/d.

Inland production is nonetheless holding up at around 106 Bcf/d, though federal data point to an incremental decline of around 3 million cubic feet per day by next year.

All that comes amid a bevy of new LNG developments since the start of the second term in January for U.S. President Donald Trump, who's supported the industry on geopolitical grounds. Without support from U.S. LNG, members of the European Union would be faced with deep energy security concerns because of the sanctions imposed on former supplier Russia.

Asia too is hungry for more given the lack of domestic resources. On Tuesday, TotalEnergies SE (Courbevoie, France) said it agreed to deliver 1 million metric tons of LNG annually to KOGAS (Seoul, South Korea), South Korea's national natural gas company, for 10 years starting at the end of 2027.

"This agreement enables TotalEnergies to secure long-term outlets in Asia, consistently with the growth of its LNG supply, particularly from the United States", said Patrick Pouyanné, the chairman and chief executive officer of TotalEnergies.

Total did not disclose the origin of the LNG other than to say most of it would come from U.S.-based supplies. TotalEnergies is the third-largest LNG supplier in the world, while KOGAS is the world's largest importer.

(Houston), meanwhile, shored up its own supplies by signing a long-term sales and purchase agreement to buy 1 million metric tons of LNG annually from the Rio Grande export facility under development by NextDecade Corporation (Houston, Texas). The agreement, however, is subject to NextDecade making a final investment decision on the fifth liquefaction unit at the facility.

IIR Energy finds Rio Grande to be a medium-probability project, with at least a 70% chance of moving forward.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the project report.

Elsewhere, EQT Corporation (Pittsburgh, Pennsylvania) secured 1 million metric tons of LNG annually under a 20-year sales and purchase agreement for the proposed Commonwealth LNG facility, slated for coastal Louisiana.

Drawing on its vast inland shale natural gas deposits, the U.S. is the largest exporter of LNG in the world, and recently passed Russia to take the No. 2 position in terms of market share in Europe, behind Norway.

While the Trump administration created a council for energy dominance to bolster LNG trade, it's largely up to individual companies to secure offtake agreements. Trump's tariff policies, meanwhile, add a layer of uncertainty. The president is looking for the Supreme Court to overturn a federal court ruling that he overstepped his authority with some of his trade plans.

Maria Sanchez, a senior natural gas analyst at IIR Energy, said U.S. market players may need stronger signals to incentivize new investments, but the outlook now looks reasonably stable.

"Looking ahead, continued expansion of LNG exports could tighten supply, leading to periods of higher prices, though these are likely to be temporary while production catches up," she said.

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) 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 over 200,000 current and future projects worth $17.8 Trillion (USD).