LNG Demand Surges: US Natural Gas Supply Chain Faces Critical Juncture
The US liquefied natural gas (LNG) industry is experiencing rapid growth, but it's facing a new challenge, securing enough natural gas to feed its expanding facilities. East Daley Analytics expects LNG demand for natural gas to reach 35 Bcf/d by 2035, putting pressure on developers and offtakers to lock down supply.
The current eight commercially operating LNG facilities require about 15.5 Bcf/d of gas, with Plaquemines LNG and Golden Pass LNG Train 1 adding another ~4.5 Bcf/d. The upcoming trains at Golden Pass will increase total US LNG feedgas demand to roughly 21.5 Bcf/d.
Developers are not slowing down, with the Department of Energy recently authorizing Argent LNG to export up to ~3.6 Bcf/d from its proposed Port Fourchon, LA terminal. Other projects like Venture Global's CP2 LNG expansion and NextDecade's Rio Grande LNG expansions will also contribute to the growth in demand.
East Daley expects Henry Hub prices to approach $5/MMBtu by 2031, which could support production growth. However, new Permian pipelines will not solve the entire problem, as producers must eventually move beyond their lowest-cost drilling inventory and secure low-cost feedgas through firm transportation.