North American liquefied natural gas (LNG) developers and producers this year have struck deals to sell 48 million tonnes of LNG, which will eventually pump up exports 60% from current levels, although much of the output remains years away. LNG demand is soaring as the conflict in Ukraine pushes global prices to their highest in at least 14 years. Buyers in Europe have looked West in a move away from Russian gas, and Chinese buyers are striking long-term deals after a pause.
Eight North American LNG export terminals are under construction and over a dozen more could receive financial greenlights by 2023. Some buyers have locked in supplies from plants that have not yet been approved for construction, so not every supply agreement may go ahead.
This week, European gas prices hit $84 per million British thermal units (mmBtu) and U.S. gas futures on Tuesday topped $10 per mmBtu for the first time since 2008.
Goldman Sachs forecasts global LNG demand to rise about 12% 424 MTPA next year and expects new plants that will supply 156 MTPA to be approved within the next five years. Growing demand has made the United States this year’s largest LNG exporting nation during the first six months. Approved projects that are expected to begin shipments between 2023-2026 could keep the country in first place.
“The global energy crisis has been years in the making due to significant underinvestment,” said Octavio Simoes, CEO of Tellurian, which recently started construction on its long-delayed plant in Louisiana.
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