A vessel docked at a jetty on Louisiana’s coast is claiming its cargo of liquefied natural gas. Ice forms on a pipe as chilled fuel extracted from fields as far away as Texas or Pennsylvania is sent into the tanker’s insulated hold for shipment overseas.
Cheniere Energy’s Sabine Pass export terminal is one of seven operating in the US, all of them running flat out to feed a global market desperate for energy.
Europe’s goal to cut dependence on Russian natural gas in response to Moscow’s war in Ukraine should be a bonanza for LNG export companies in the US, the world’s largest gas producer. Investors in these specialist companies are bullish, as reflected in a recent all-time high for Cheniere’s stock price.
But prospects for more than a dozen new American liquefaction projects remain highly uncertain as construction costs rise, the US gas price soars and climate policymakers pursue a long-term shift away from fossil fuels and their associated emissions. Even the most advanced projects will take years to feed additional supplies to the world.
The US began sending out LNG from shale gas six years ago, as new supplies unleashed through fracking prompted Cheniere to build export infrastructure at Sabine Pass, originally designed to handle imports.
Total US LNG capacity now stands at 120bn cubic meters a year. Three more plants due online by 2025 will bring 70bn cu metres of new capacity. Another 206bn cu metres worth of plants have federal regulatory approval but await a final green light from their sponsors.
European Commission president Ursula von der Leyen announced a deal with US president Joe Biden last month under which the EU would guarantee long-term demand for another 50bn cu meters a year of LNG. The volumes would offset some of the 155bn cu metres of gas the EU imported from Russia last year.
“I think everyone felt an enormous uplift over the course of the last three to four weeks,” said Dan Brouillette, a former US energy secretary in the Trump administration and now president of Sempra Infrastructure, which has a majority stake in Louisiana’s Cameron LNG plant. European attitudes to