In 2023, the United States became the world’s biggest exporter of natural gas, surpassing exporting leaders Qatar and Australia. In the form of super-cooled liquefied natural gas (LNG), US exports have skyrocketed in the last seven years. Before 2016, the US exported virtually no LNG at all. The Shale Boom, using a method of hydraulic fracturing and horizontal drilling in shale basins, has helped make the US energy independent and a net exporter of oil and natural gas. This trend will continue with several major projects along the Gulf Coast expected to be completed, significantly increasing LNG exports from the US.
Developers advanced three LNG projects (Plaquemines Phase 2 in Louisiana, Port Arthur Phase 1 in Texas, and Rio Grande Phase 1 in Texas) to the construction phase in 2023, following the signing of sale and purchase agreements (SPA)—contracts specifying the terms and conditions of LNG supplies between seller and buyer—underpinning the projects. Developers signed contracts with buyers for almost 22 million metric tons per year of LNG last year, or about 3 billion cubic feet per day (Bcf/d) of natural gas, according to data from the U.S. Department of Energy (DOE) and from company websites.
The final investment decisions (FID) for these projects came before DOE paused review of LNG export permits to countries with which the United States does not have a free trade agreement. All the projects that reached FID in 2023 already had export approvals from DOE. There are currently four projects being delayed by the DOE review pause: Sempra’s Port Arthur Phase 2, Commonwealth LNG, Glenfarne Group’s Magnolia LNG and Energy Transfer.
Also included in the nine projects that signed SPAs in 2023 are three proposed projects and two projects that have received their respective regulatory approvals. Even though the approved projects, which would add approximately 3.8 Bcf/d of U.S. LNG export capacity, have export approvals from DOE, they are still under consideration by the companies and have not yet reached FID.
The LNG volumes contracted in 2023 are relatively evenly split between offtake companies based in Europe and those based in Asia, indicating the likely destination for those cargoes. However, destination flexibility is a common feature of most of the SPAs, where the buyer can deliver LNG to any destination as long as it complies with DOE export authorizations and U.S. law.
List of approved LNG projects, including yearly capacity and estimated start dates:
