US LNG Exporters Continue New Projects Despite Trade War Uncertainty

Woodside Energy's decision last month to proceed with its Louisiana LNG export facility was the first of over 90 million tonnes of new LNG shipping capacity U.S. companies plan to approve this year despite uncertainty about President Donald Trump's trade war, according to company statements and analysts.

The U.S., already the world's largest exporter of the superchilled gas with 91.3 million tonnes of annual capacity, should triple that before 2030 thanks to projects awaiting final investment decisions. Those come on top of 95.7 mtpa under construction, according to an April note to clients from Poten and Partners.

Trump has said he wants to vastly expand U.S. energy production and exports, and his administration has lifted a freeze on new LNG export permits, declaring an energy emergency.

The trade war has complicated construction of new plants, analysts and developers said, especially Trump's 25% tariffs on steel and aluminum which are heavily used at LNG facilities. Some worry this might ultimately raise prices for U.S. LNG exports, making customers look for cheaper alternatives.

Still, at least seven proposed U.S. LNG projects are in various stages of development, with owners saying they intend to make a final investment decision in 2025, according the Reuters survey of recent earnings reports and analyst calls. 

Five of the seven are expansions of existing facilities. The other two are on green field sites without existing infrastructure like port facilities: Energy Transfer's 16.5 mtpa LNG plant at Lake Charles and Commonwealth LNG's proposed 9.5 mtpa facility at Cameron, both in Louisiana.

Among companies expected to soon approve construction of additional export facilities are the two largest U.S. LNG exporters, Cheniere Energy and Venture Global.

Cheniere is on track to approve this year its 5 MTPA expansion of its Corpus Christi, Texas plant, called mid-scale 8 and 9, the company's CEO Jack Fusco said last Friday during its earnings call. 

The Federal Energy Regulatory Commission issued a "permit on mid-scale Trains 8 and 9, one of the key remaining steps ahead of an expected FID later this year," Fusco said. FID stands for final investment decision.

Venture Global aims to approve the 28 MTPA CP2 project in Louisiana, the largest single LNG plant in the U.S., in the "middle of this year", its CEO Mike Sabel said at an earnings call on Tuesday. 

Last week, the company said it received the final supplemental environmental study on its CP2 plant. It also has its non-FTA export permit, allowing it to export to a broad range of markets. 

"An essential permit ahead of our FID for phase one of the project, which is anticipated for the middle of this year," Sabel told the earnings call.

Commonwealth LNG, Port Arthur LNG and Next Decade announced several long-term supply deals in 2025, building commercial momentum toward final investment decisions they promise will come this year.     

TRADE HEADWINDS       

Venture Global's Sabel said increased steel, aluminum and other tariffs could raise the cost for CP2 by about 1%. 

Sempra aims to make a final investment decision (FID) this year on phase 2 of its Port Arthur facility but will exercise patience to lock in favorable long-term economics, said Jeffrey Martin, Sempra's CEO.

"Uncertainty in the macroeconomic environment may affect the timing of product development," he said.

Since 2021, almost all U.S. LNG projects under construction have faced price escalation or cost overruns due to supply chain disruptions, labor shortages, high borrowing costs and other factors. 

Woodside's Louisiana LNG project price jumped by 31%, Next Decade's Rio Grande facility increased by 29% and Port Arthur Phase 1 by 18% from the original pre-FID figures, said Alex Munton, director of global gas and LNG research at consulting firm Rapidan Energy Group.  

He noted those increases hit largely before Trump imposed tariffs on steel and aluminum. Even if the White House totally cancels country-specific reciprocal tariffs, those 25% tariffs on steel and aluminum and the 10% blanket levy remain in place putting pressure on LNG construction costs, Munton said.

Cheniere has promised to maintain capital discipline and will ensure it sells over 90% of its capacity before FID, said the company's Chief Commercial Office Anatol Feyin.

Woodside, in contrast, said it gave the financial go ahead for its Louisiana LNG terminal with long-term sale contracts for only 1 MTPA in place.

"We saw the first FID in two years here. And very little commercial activity to underpin that," Feyin told the earnings 

call. "We're not changing our stripes. We'll stay disciplined."

On Wednesday, Woodside announced it entered into a non-binding agreement with Saudi Aramco that could lead to the Saudis taking a stake in the Louisiana project  

Either way, U.S. LNG projects remain attractive, said Ira Joseph, an LNG market expert and senior researcher at Columbia University's Center on Global Energy Policy. 

"Clearly not having customers is not impeding potential financing for these projects in a way it used to," Joseph said.

 Below is a list of U.S. projects awaiting FIDs:     

 (Reuters/Reporting by Curtis Williams in Houston; Editing by David Gregorio)