Rising Gas Prices Threaten US LNG Competitiveness

US liquefied natural gas (LNG) projects are facing a growing challenge to maintain their competitive edge as domestic natural gas prices climb, according to Jesus Bronchalo, CEO of Fulcrum LNG. Speaking at a panel discussion at Rice University’s Baker Institute, Bronchalo warned that rising gas prices in the US could make LNG production too expensive, undermining the country’s position in the global market.

The US is already one of the most expensive locations for LNG production, and Bronchalo expects prices to rise further. He cautioned that the increasing costs could eventually make US LNG projects uncompetitive. However, Joshua Lubarsky, president of maritime firm Seapath Group, noted that the stability provided by US gas price dynamics remains attractive to buyers.

The financing landscape for US LNG projects is also evolving, with a shift away from traditional external loans toward private equity supported by government-backed sovereign wealth funds. Julie Mayo, general counsel at Infrastructure, highlighted Sempra’s use of private equity funds for its expansion as an example of this new approach. Sempra is a major US LNG exporter, operating facilities like the Cameron LNG and Port Arthur developments.