Rising US gas prices threaten LNG export competitiveness

US liquefied natural gas (LNG) projects may struggle to maintain their competitive edge as domestic gas prices continue to rise, according to Jesus Bronchalo, CEO of Fulcrum LNG. Speaking at a panel discussion at Rice University's Baker Institute, Bronchalo warned that higher natural gas prices in the US could make LNG production less competitive globally. He specifically referenced the Henry Hub, the US gas price benchmark, stating that rising costs could erode the country's advantage in LNG exports.

Joshua Lubarsky, president of maritime firm Seapath Group, offered a contrasting view during the same conference. While acknowledging that the US is among the highest-cost LNG producers worldwide, he noted that the stability of US gas price dynamics remains appealing to buyers. This stability, he suggested, could offset some of the higher production costs.

The financing landscape for US LNG projects is also evolving, with a shift away from traditional external loans. Julie Mayo, general counsel at Infrastructure, highlighted the growing role of private equity supported by government-backed sovereign wealth funds. She cited Sempra's use of private equity funds for expansion as an example of this new approach. Sempra operates two of the largest US LNG export facilities, Cameron LNG and Port Arthur.