Houston, Texas – The demand for liquefied natural gas (LNG) has been steadily increasing over the past decade, leading to significant growth in new U.S. LNG export projects. This surge in demand can be attributed to various factors, including global economic development and a shift away from coal for power generation. The recent geopolitical events, such as Russia’s invasion of Ukraine, have also contributed to the spike in LNG demand, with the Western embargoes on Russian natural gas driving the need for alternative energy sources.

Looking ahead, experts project a continued increase in global LNG demand, particularly as countries like China transition away from coal and local natural gas production starts to decline. Major players in the LNG market, such as Shell, anticipate global demand growth to exceed 50% by 2040.

The United States has emerged as a leader in LNG exports, with the country boasting the largest LNG export capacity in the world. In 2023, the U.S. exported an average of 11.9 billion cubic feet per day of LNG, according to the U.S. Energy Information Administration (EIA). With abundant and affordable natural gas supply, the U.S. is actively developing new LNG projects to increase export capacity further.

Currently, there are six LNG projects in the United States under development, set to increase capacity by 80% from 14 billion cubic feet per day in 2024 to over 25 billion cubic feet per day by 2028. However, the growth of U.S. LNG exports is dependent on the completion of additional facilities to meet the rising demand.

Two major LNG projects are anticipated to be completed by the end of 2024: Ventural Global’s Plaquemines project in Louisiana and Cheniere Energy’s Corpus Christi Liquefaction Stage 3 in Texas. These projects are expected to add significant liquefaction capacity, with U.S. LNG exports projected to increase by 18% in 2025.

Despite the optimistic outlook for the LNG industry, there have been challenges, including a temporary pause on new LNG export licenses to non-Free Trade Agreement countries announced by the Biden administration in January. This pause, aimed at conducting economic and environmental impact studies, may delay the approval of new LNG projects. However, such delays could help prevent a supply glut in the near term and extend the growth story of the LNG market beyond 2028.

The growth of LNG exports also presents opportunities for midstream companies involved in the energy infrastructure. These companies play a crucial role in gathering, processing, and transporting natural gas to LNG facilities for export. As LNG export capacity continues to expand, midstream companies are expected to benefit from the steady growth in the LNG market.