Booming U.S. LNG Export Industry Gets Another Boost In Louisiana

Rapid Growth In U.S. LNG Export Sector

Energy Secretary Chris Wright and Louisiana Governor Jeff Landry were on hand for an announcement ceremony at the development site, where Wright touted the project as the latest addition to the rapid expansion of the U.S. LNG export sector.

“We’re continuing to ramp up U.S. Natural gas exports. It’ll be a record again this year, it was a record last year,” Wright said in an interview with CNBC. “We’re up to about 20 BCF a day of natural gas that we export, which is roughly double the second and third largest exporters of natural gasses, Qatar being one of those two countries.”

The point about Qatar is key to this discussion since its LNG volumes – roughly 20% of global supply prior to Feb. 28 – have been largely absent from the market after the country’s major liquefaction and export facilities at Ras Laffan suffered major damage after being hit by Iranian missiles in early March. The shortage of supply has resulted in a dramatic increase in demand for LNG cargoes from the U.S. and other exporting countries.

Mubadala: Commonwealth a Part of a Long-Term Strategy

“Recent disruptions have certainly increased global awareness around energy security and supply chain resilience,” Mubadala Chief Operating Officer Adnan Bu Fateem told me in an interview on Friday. Fateem adds that the company’s investment in Caturus and Commonwealth LNG was made long before the advent of the Iran Conflict, closing in August of last year. He also points out that this investment is part of a larger strategy to make major investments in the U.S. and its booming energy economy.

“Our approach is fundamentally long-term. We are not financial investors seeking short-term exits, nor are we pursuing opportunistic deployment,” Fateem says. “The U.S. market offers significant scale, strong long-term demand fundamentals, and substantial potential for continued growth across natural gas and LNG. As we continue to strengthen our international portfolio, we will actively evaluate additional opportunities that align with our disciplined investment framework, operational strengths, and long-term growth objectives.”

There is little question that the United States presents an opportunity-rich environment for international investors in its energy economy. Commonwealth LNG joins an array of major projects under construction along the Gulf of America coast in Texas and Louisiana. In addition to Venture Global’s CP2 project which I wrote about last month, major expansion or greenfield projects are underway at Rio Grande LNG, Port Arthur LNG and Woodside’s Louisiana LNG.

At least 8 more projects in addition to those are in the planning or pre-construction phase with plans for completion by 2030, when Commonwealth LNG will be scheduled to go online. If all of this array of multi-billion-dollar projects make it to completion, America’s LNG export capacity will more than double by that year.

It is an extraordinary pace of expansion which is directly attributable to the Shale Revolution which took place across this century’s first two decades. The combination of horizontal drilling with high pressure hydraulic fracturing – or “fracking” – enabled hundreds of U.S. and international companies to unlock massive new volumes and reserves of both natural gas and crude oil from dense shale formations which had previously been inaccessible to the industry.

Two decades ago, domestic natural gas was in such short supply that the U.S. Department of Energy projected that the United States would have to become a major importer of liquefied natural gas to meet its daily needs, and the industry was investing in and building big import facilities. But, as the Shale Revolution gained steam, all of those import facilities were either abandoned or converted to exports and have been joined by dozens of competing terminals. With a dozen more projects on the way, the LNG export sector ranks with the AI/data center sector as two of America’s fastest-growing industries.

Strong Long-Term Outlook for U.S. LNG Exports

Fateem says Mubadala Energy anticipates this trend to continue into the future. “The long-term outlook for LNG remains strong because it supports several key priorities – strengthening energy security, providing a lower-emission alternative to heavier fuels, and helping meet growing demand from power generation, industrial development, and new areas of energy consumption such as data centers,” he says, adding, “We see the United States as a core strategic market and one where we expect to continue building over time.”

As global energy systems continue to change, demand for reliable and lower-emission energy remains strong. The LNG export industry is playing an increasingly important role as countries work to balance decarbonization goals with affordability, industrial growth, and energy reliability. Already by far the world’s biggest LNG supplier, no country can offer greater opportunity for continuing expansion or more attractive projects for international investment than the United States.