US LNG Exporters Race to Secure Financing Before Supply Surplus Hits

US developers are urgently seeking financing for liquefied natural gas (LNG) projects as a surplus in global supply looms. The rapid expansion of terminals in the United States has positioned the nation as the world’s leading LNG exporter. However, according to a recent report by BloombergNEF, there is a pressing deadline for projects still in development, with global LNG supply expected to exceed demand by 2027.

As competition intensifies, additional challenges arise. Qatar is set to complete its significant LNG infrastructure expansion by 2030, which could further reduce the market’s appetite for new US terminals. Additionally, a major pipeline project by Gazprom PJSC is anticipated to increase natural gas exports to China, potentially displacing up to 40 million metric tons of LNG demand annually by 2031.

Four significant US LNG projects, with a combined export capacity of 63 million tons per year, are awaiting final investment decisions. The ongoing $35 billion construction of LNG facilities also faces obstacles, such as a tight labor market that threatens to delay timelines. For instance, the Golden Pass LNG terminal in Texas, developed jointly by Exxon Mobil Corp. and QatarEnergy, is now expected to commence operations in 2025, one year later than initially planned due to worker shortages and contractor bankruptcy.

Key Projects in Development

Several notable projects are currently in various stages of development and financing:

Louisiana LNG is being developed by Woodside Energy and will have a capacity of 27.6 million tons per year. Following the acquisition of Tellurian Inc. in 2024, Woodside made a $17.5 billion final investment decision for the project, which is set to become operational by 2029.

The Corpus Christi LNG expansion, led by Cheniere Energy Inc., will increase capacity by 3 million tons per year. This $2.9 billion project is expected to come online by the end of the decade, boosting total capacity to 30 million tons annually.

CP2 LNG, developed by Venture Global, represents a $15.1 billion investment in Louisiana with a planned capacity of 28 million tons per year. While the project faced delays due to a permitting pause under President Joe Biden, it resumed progress after former President Donald Trump lifted the moratorium.

The Rio Grande LNG expansion, developed by NextDecade Corp., is currently constructing the first phase with an annual capacity of 18 million tons. The company is seeking funding for additional expansions that would add 12 million tons of capacity. A crucial deadline is approaching, as the contract with its contractor, Bechtel, is set to expire in September.

Another significant project, the Port Arthur LNG expansion, is being undertaken by Sempra, which aims to double its capacity to 13 million tons per year. Although Sempra is actively working on this expansion, it has not provided a timeline for a final investment decision.

Lastly, Commonwealth LNG, backed by private equity firm Kimmeridge, is aiming to finalize its investment decision in the third quarter for a project near Cameron, Louisiana, with a capacity of 9.5 million tons.

The Lake Charles LNG facility, developed by Energy Transfer, is also in the pipeline, aiming for a final investment decision by the end of the fourth quarter. This plant, previously an import terminal, has a planned capacity of 16.5 million tons per year but still requires full contracting of its capacity.

As the US LNG landscape continues to evolve, the race for financing and timely project completion remains critical. With the potential for a supply surplus on the horizon, US developers must navigate these challenges to maintain their competitive edge in the global energy market.