A fresh wave of newcomers has entered the US LNG development scene, positioning themselves to compete with larger, more established players to serve a growing — but finite — global gas market.
The infusion has raised questions about whether these lesser-known companies are riding a wave of irrational exuberance aided by an increasingly pro-LNG stance in Washington. But several analysts and industry officials tell Energy Intelligence there’s plenty of room for competition, even though they agree not all of the projects will advance.
“It’s very clear there will be robust demand for US LNG in coming decades. LNG demand from Asia is projected to nearly double to 2050, and nations in our region are looking to the US for affordable and reliable supply that can help support and transform their energy systems,” said Paul Everingham, CEO of the Asia Natural Gas & Energy Association.
“While supply and demand levels ebb and flow over time for all commodities, the LNG industry in general and the US in particular have shown sustained growth over time, and we expect this to continue,” he added.
Survival of the Fittest?
So far this year, the US LNG sector has seen a pair of formal final investment decisions (FIDs) and one informal one, all connected to larger players Woodside Energy, Cheniere Energy and Venture Global.
At the same time, several burgeoning developers have introduced new proposals for export capacity or taken steps to advance projects already announced. Those include the proposed 20 million ton per year (2.8 billion cubic foot per day) Argent LNG terminal to be located at Port Fourchon, Louisiana; Coastal Bend LNG’s recently unveiled plans for a 22.5 million ton/yr (3 Bcf/d) terminal on the Texas Gulf Coast; and the 4 million ton/yr (0.6 Bcf/d) Gulfstream LNG, which this week became the first greenfield project in more than five years to formally apply for a US Federal Energy Regulatory Commission permit.
Despite this flurry of activity, Argent CEO Jonathan Bass doesn’t see an overbuild brewing for US LNG. He said some of the expected FIDs are likely to fall through as companies struggle to keep their offtake contracts in line with rising projects costs. Those costs have been exacerbated by the Trump administration’s chaotic tariff policies affecting LNG project inputs.
Meanwhile, “we don’t have enough projects to meet the increased demand,” Bass maintained. “You look at the amount of energy being consumed in the world today, you look at Egypt that’s starving for it, you look at Bahrain that’s running out of gas, you look at Turkey that needs gas … Bangladesh, Vietnam, Thailand, and India that needs another eight to 25 million tons in the next five years.”
‘A Lot of Enthusiasm’
Jason Feer, head of business intelligence at Poten & Partners, agreed that “there is a lot of enthusiasm for US LNG. Give the number of projects progressing, it’s not a surprise that we are seeing new projects.”
“People argue about whether there will be a surplus and how much it will be. I would expect to see lower prices and probably some US [cargo] cancellations, depending on when supply actually enters the market,” Feer said. “But from a US point of view, most US projects don’t have price exposure, so as long as their offtakers pay the liquefaction fees even if they cancel cargoes, they will be fine. We saw this in 2020 when we had many cancellations. Over time, demand growth will absorb any length so I would expect that cancellations would be limited in duration.”
But he did sound one cautionary note: “Given how many expansion opportunities there are, the greenfield projects will have to demonstrate significant quality to be competitive.”
The market will ultimately sort out who wins and who loses, Mehdy Touil, lead LNG specialist at Calypso Commodities, told Energy Intelligence. “The reality is that although the sector has been revitalized by Trump’s position on LNG projects, a more favorable regulatory environment alone won’t alter the underlying economics, and in fact, many projects will not advance beyond the filing stage.”
