Key Points:
- The US became the world’s top LNG supplier in just ten years.
- Experts predict export capacity will double within the next five years.
- Cheniere Energy shipped the first major cargo from Louisiana in 2016.
- High demand from Europe and low production costs fueled the boom.
It has been exactly ten years since the first major shipment of liquefied natural gas (LNG) left the coast of Louisiana. On February 24, 2016, Cheniere Energy sent a tanker full of the ultra-cooled fuel from its Sabine Pass facility. That moment kicked off a massive energy boom. Today, the United States stands as the world’s top LNG supplier, having passed heavyweights like Qatar and Australia.
The industry shows zero signs of slowing down. Analysts and executives predict that the United States will double its record-breaking export capacity in just five years. Currently, the country processes about 18 billion cubic feet of natural gas into liquid fuel every day. The U.S. Energy Information Administration (EIA) says this success comes from having huge gas reserves, cheap production costs, and flexible contracts that buyers like.
Europe played a huge role in this recent surge. After Russia invaded Ukraine, European nations scrambled to find new energy sources, and American suppliers stepped in to fill the gap. This favorable investment climate encouraged companies to build more infrastructure faster than ever before.
Major players are betting big on this growth. Cheniere told reporters it invested $50 billion over the last decade to expand its two export terminals. The company grew its capacity from 9 million tons per year in 2016 to approximately 52 million tons today. They plan to hit 100 million tons by the mid-2030s.
Another giant, Venture Global LNG, sprinted from a startup with zero capacity to operating or building three facilities in just six years. They have plans for over 100 million tons of annual capacity in the pipeline.
However, some experts worry about having too much of a good thing. Shell CEO Wael Sawan noted earlier this month that the LNG sector is expanding at about 3 percent per year. This pace is faster than the actual gas market is growing. This raises a tough question: will the world buy all the fuel the United States plans to sell, or is the market about to flood?
