Liquefied natural gas (”LNG”) facility activity has been rising lately. From permitting to near-term expected completions, the LNG export market has experienced increased interest due to elevated global demand for the commodity.

History of LNG in the United States

As shown by the map below, the United States currently has six LNG Export Terminals that are in operation. Until recently, the count was seven before an explosion at Freeport LNG, which resulted in a force majeure declaration and operational shutdown until late 2022. The first of the remaining facilities, the Kenai LNG Plant, was completed in 1969 and was the sole U.S. export terminal for decades.

Source: FERC

In 2016, several new terminals began to operate, resulting in a substantial increase in U.S. LNG exports. Export capacity quickly ramped from 1 billion cubic feet per day (Bcf/d) in 2015 to 10.78 Bcf/d in 2021.

Source: EIA

A Rise in the Permitting and Construction of U.S. LNG Plants

More export plants have been approved in the past few years, with three already moving forward to the construction phase. Many of the remaining sites have been permitted by FERC, but stalled until recently with no tentative date of construction. Due to the effects of the Russian-Ukraine war and the significant reduction of Russian imports to Europe, the demand for U.S. gas supply skyrocketed. In the past, U.S. exporters entered into long-term contracts with European buyers to ensure financial stability and service. However, in recent weeks White House policymakers have shifted away from this, working to move more projects towards a final investment decision (FID) driven by the expected need for the commodity. Dan Brouliette, former U.S. energy secretary and current president of LNG exporter Sempra’s infrastructure unity, said, “They (European states) are going to be buying more gas, not less.” With this European hunger for natural gas, many projects have been revitalized and advanced.

Source: FERC

Current Progress on Specific U.S. LNG Plants

A few of these projects, in particular, are in a good position for near-term operation. Calcasieu Pass operation is anticipated in the Summer of 2022; this facility has the potential to elevate U.S. exports of LNG by 15%, to approximately 13.9 Bcf/d. Golden Pass LNG, located in Sabine Pass, Texas, on the Gulf Coast, is expected to be completed by 2024, with Cameron Train 4 following in 2027. Plaquemines LNG, Driftwood LNG, and Rio Grande LNG recently began construction. It is estimated that the combined capacity of these three plants, set at 66 million tons, would be enough to displace 40% of Russian gas exports. Another project anticipating a final investment decision (”FID”) by Summer 2022 is Corpus Christi Stage III.

Obstacles Faced

While the potential for the LNG market to boost exports is vast, present economic conditions have produced significant obstacles. Materials costs have risen 20% on average within the last two years, with the potential for metal prices to increase an additional 10% due to short supply. Specifically, the nickel required for piping has risen 10% in the last year, and nickel alloy costs have ballooned by 40% in the previous three months. Steel, a significant building input, has increased by 40% in the past year. This higher cost means lower project returns for LNG developers, which could factor into the project construction and progress we see in the coming months. One way developers are trying to combat this is by using new modular liquefaction units such as those produced by Baker Hughes. These units are prebuilt in a factory and can be put together like building blocks later. Robert Songer, the LNG analyst at ICIS, said, “Using modular units has the potential to offer savings in both time and money compared with building a complex, large-scale project from scratch.”


With six currently operating facilities, the United States LNG exports comprise a small percentage of the global natural gas supply. However, due mainly to the reduction of Russian gas imports in Europe and heightened global demand, there is renewed interest in advancing U.S. LNG projects which were long stalled. With increased FIDs and revamped construction, the U.S. can expect to take on a much more significant role in this sector.

Andrew Schaper is a professional engineer and principal of Schaper Energy Consulting.  His practice focuses on advisory in oil and gas, sustainable energy and carbon strategies.

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