Most of the second wave of US LNG export projects will be located along a small stretch of the Gulf Coast, from Port Arthur on the Texas-Louisiana border to the Mississippi River in southeast Louisiana. Three of those projects—Golden Pass LNG, Port Arthur LNG and Plaquemines LNG—are under construction there and will add nearly 7 Bcf/d of new gas demand by 2028, and others could reach a final investment decision (FID) in the coming months or years. This has led to a frenzy of natural gas pipeline projects competing to serve this growing demand center, either by moving incremental supply into the area or by providing “last mile” delivery to terminals. These pipeline expansions, and how incremental capacity, geography and timing align with liquefaction capacity additions, will drive the pace of global gas demand growth and how the Lower 48 gas market will balance out in the coming years. In today’s RBN blog, we discuss the highlights of our new Detailed report detailing the large number of announced pipeline projects targeting LNG exports from the Port Arthur, TX/Louisiana region.
LNG exports will be the main driver of natural gas demand growth in North America over the next five years. After a pause in export capacity additions in 2023, the next wave of liquefaction projects is expected to begin in 2024, starting with the completion of Golden Pass LNG. Including Golden Pass, seven projects have reached FID and are under construction, while another 28 are in various stages of development and working to achieve capacity and financial commitments to reach FID. While these projects span North America, importantly, most of the new capacity is being planned or proposed for the US Gulf Coast, and in particular, along a stretch of less than 100 miles of coastline in the northwest corner of the Gulf of Mexico, between the Beaumont/Port Arthur area near the Texas-Louisiana border and the Mississippi River in southeast Louisiana.
At full utilization of contracted capacity, feed gas demand at terminals already operating in the Port Arthur/Louisiana region totals ~8 Bcf/d (gray bar in Figure 1), including ~4.5 Bcf/d at Cheniere Energy’s Sabine Pass LNG, ~2 Bcf/d at Sempra Energy’s Cameron LNG, and ~1.5 Bcf/d at Sempra Energy’s Cameron LNG, and ~1.5 Bcf/d at LNG from Ventura since cargo is being loaded at Ventura. in the first quarter of 2022, but has not yet been commercialized. Additionally, of the seven FID projects currently under construction, three are located in this area (pink bars): Golden Pass LNG in the Beaumont/Port Arthur area, due to begin service in 2024; and two recently sanctioned greenfield facilities: Venture Global’s Plaquemines LNG on the Mississippi River in southeast Louisiana and Sempra Energy’s Port Arthur LNG, also in the Port Arthur area. Together, these three projects account for nearly 7 Bcf/d of the incremental feed gas demand to come online over the next five years, bringing total feed gas demand in the region to nearly 15 Bcf/d by 2028 (maroon bar). And beyond these greenlight projects, there are still more expansions to FID, including some short-term ones.
