US DOE releases LNG export study

The Biden administration said in January it will pause pending decisions on exports of LNG to non-FTA countries until DOE can update the underlying analyses for authorizations.

However, the US LNG industry believes the Trump administration will resume with non-FTA approvals in 2025.

On Tuesday, DOE released its multi-volume study on the potential effects of US LNG exports on the domestic economy, US households and consumers, and the environment and climate.

DOE said it intends to use the study to inform its public interest review of, and ultimately decisions in, certain applications to export LNG to countries with which the US does not have FTA requiring national treatment for trade in natural gas, and with which trade is not prohibited by US law or policy (non-FTA applications), future proceedings, and for other purposes.

In short, DOE says its analysis “exposes a triple-cost increase to US consumers from increasing LNG exports.”

DOE also said “special scrutiny needs to be applied toward very large LNG projects” considering their direct life cycle emissions.

“Any sound and durable approach for considering additional authorizations should consider where those LNG exports are headed, and whether targeted guardrails may be utilized to protect the public interest,” DOE said.

The study will have a 60-day comment period that will begin once published in the Federal Register.

The effects of this study remain to be seen.

Largest LNG exporter

DOE noted the US LNG export sector has experienced “transformative and unprecedented” growth in just a decade, with the first LNG exports from the lower-48 states commencing in 2016.

DOE has authorized 48 billion cubic feet per day (Bcf/d) of natural gas for export, or nearly half of current domestic production.

Of this 48 Bcf/day in total authorized exports, 14 Bcf/d of associated capacity is now operating, making the US the largest exporter of LNG in the world.

Another 12 Bcf/d is under construction and expected to double present export volumes by 2030, at which time the US will remain the top exporter, DOE said.

And a further 22 Bcf/d of capacity exports has been approved by DOE, but has not secured a final investment decision to begin construction.

Currently, the US exports LNG via Cheniere’s Sabine Pass and Corpus Christi terminals, Sempra Infrastructure’s Cameron LNG terminal, Venture Global’s Calcasieu Pass, the Freeport LNG facility, the Cove Point LNG facility, and the Elba Island terminal.

Venture Global LNG recently started producing LNG at its Plaquemines LNG export plant in Louisiana. With this, Plaquemines LNG becomes the eighth US LNG export facility.

Cheniere’s Corpus Christi Stage 3 is also expected to begin LNG production by the end of the year.

In addition, energy giants QatarEnergy and ExxonMobil are working to launch their Golden Pass LNG export facility in 2025 or 2026.

LNG Prime invited the largest LNG exporters in the US, Cheniere, Sempra, Venture Global LNG, and Freeport LNG to comment on the DOE study and its potential impacts on LNG exports.

Venture Global LNG and Cheniere did not respond.

Sempra confident in Port Arthur LNG expansion

Sempra Infrastructure, a unit of Sempra, expects to secure DOE’s non-FTA export approval for the second phase of its Port Arthur LNG export project in Texas in the first half of 2025.

The company previously won approval from the US FERC for the proposed Phase 2 project, and it also secured the FTA approval from the DOE.

In July, Sempra Infrastructure and compatriot engineering and construction firm Bechtel finalized a fixed-price engineering, procurement, and construction (EPC) contract for the second phase of the Port Arthur LNG export project.

Bechtel is already building the first phase of the Port Arthur LNG export terminal with a capacity of some 13 mtpa under an EPC deal worth about $10.5 billion.

The development of the proposed second phase would increase the total liquefaction capacity of the facility to about 26 mtpa.

“We are analyzing the Department of Energy study on the impacts of US LNG exports,” a spokesman for Sempra Infarsturcure said.

“We remain confident in the merits of our Port Arthur LNG Phase 2 project for our stakeholders and the crucial role it could play in displacing heavier fuels and ensuring access to reliable and secure energy for our customers around the globe, while continuing to support a growing economy in the United States through local jobs and economic development,” he said.

“Study results runs counter to the actual findings of the report”

A spokeswoman for Freeport LNG, the operator of the 15 mtpa liquefaction plant in Texas, did not comment on the DOE study.

She instead referred to a statement issued by the Washington-based organization CLNG.

“The Department of Energy’s US LNG export “pause” harmed the industry and called into question the role of the US as a global energy superpower. This study, which served as the justification for the pause, has yet again found that US LNG exports provide benefits that serve the public interest,” Charlie Riedl, CLNG executive director, said.

“As we continue to examine the report, we have found that much of the narrative from the administration on the need for a pause in LNG export authorizations and their framing of the study results runs counter to the actual findings of the report. We are prepared to closely examine this study and compare its results to previous studies commissioned by the DOE on this topic,” Riedl said.

“We look forward to working with the incoming Trump administration to create lasting
regulatory certainty for US LNG exports,” he said.

(Article updated to include more information and comments.)