North American liquefied natural gas (LNG) exports are expected to see significant growth in the next five years, driven by record production in the United States, according to a forecast by the U.S. Energy Information Administration (EIA) on September 3. The report states that LNG export capacity in North America is projected to more than double from 11.4 billion cubic feet per day (Bcf/d) in 2023 to 24.4 Bcf/d in 2028.
The EIA’s projections are contingent on the successful construction and operation of ten projects currently underway in Mexico, Canada, and the United States. This comes after the Department of Energy (DOE) approved its first LNG export permit to a non-Free Trade Agreement (FTA) nation since President Biden’s temporary pause on such applications was imposed earlier this year.
The DOE’s approval allows Houston-based New Fortress Energy to increase its LNG exports to non-FTA nations by 3 percent without increasing its total volume of LNG exports. As of August 30, DOE has approved a total of 46.45 Bcf/d of natural gas exports for 2024.
By 2028, EIA estimates that LNG export capacity will grow by an additional 9.7 Bcf/d in the United States, with three new terminals planned for Canada contributing an additional capacity of 2.5 Bcf/d, and two projects in Mexico adding another 0.6 Bcf/d.
In recent years, the United States has become the world’s largest exporter of LNG, shipping an average of 11.4 Bcf/d overseas in 2023—a significant increase from previous years—primarily through Mexico.
Analysts predict sustained expansion in the global LNG market due to increased export and import capacities and growing natural gas demand worldwide. A report by India-based Mordor Intelligence forecasts that the global LNG market will grow from $74.6 billion in value in 2023 to $103.41 billion by 2028—a compound annual growth rate of approximately six percent over five years.
While New Fortress Energy’s permit approval is seen as a positive step for U.S energy leadership according to industry groups like American Petroleum Institute (API), climate change groups have criticized it for potentially undermining efforts to combat climate change due to methane emissions associated with LNG production.
Despite ongoing debates surrounding environmental concerns and potential litigation against new projects like Venture Global’s CP2 project filed by environmental organizations such as Sierra Club and Southern Environmental Law Center-led coalition respectively; analysts remain optimistic about continued growth prospects for North American liquefied natural gas exports.
