Surging US LNG Exports to Fuel Gowth in Shale Gas Production

U.S. liquefied natural gas exports will soar by roughly 10% a year through 2030 as energy firms double their LNG production capacity, according to analysts, providing a shot in the arm to the country’s maturing shale industry which has seen growth slow and costs rise.

The U.S. is the world’s largest oil and natural gas producer, but many of its best drilling locations have been tapped. While oil production is expected to plateau or fall in coming months, gas remains a bright spot for the industry thanks primarily to the country’s booming exports. U.S. LNG exports are on track to soar from a record 11.9 billion cubic feet per day (bcfd) in 2024 to 21.5 bcfd in 2030, according to a U.S. Energy Information Administration (EIA) outlook. U.S. LNG producers are building new terminals to superchill gas to its liquid state for export. They aim to meet booming demand for the fuel worldwide to meet rising energy consumption and as many countries phase out coal-fired power plants.

That is providing robust growth prospects for the nation’s gas production regions. Morgan Stanley projects gas output in the Haynesville shale in Louisiana will soar by 41%, and in the Permian Basin in Texas and New Mexico by 21% from 2024 to 2027. The Marcellus and Utica shales, which span parts of Pennsylvania, Ohio and West Virginia, will grow by 9%, according to the Morgan Stanley estimates. U.S. gas producers and investment firms are gearing up for more activity in Haynesville, positioning themselves for the boom in LNG exports boosted by new approvals from U.S. President Donald Trump.

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“Within a 300-mile radius of our (Haynesville) assets, there (are) more than 12 bcfd of LNG demand under construction to be in service by 2030,” Domenic Dell’Osso, CEO at Expand Energy, the nation’s biggest gas producer, told analysts in July.

Already this year, U.S. energy firm Venture Global LNG has sanctioned the construction of CP2, its third export plant in Louisiana; while rival Cheniere Energy decided to build two additional liquefaction trains at its Corpus Christi plant in Texas. Australian firm Woodside Energy Group said it would move forward with its Louisiana LNG project.

Analysts expect more energy firms to take advantage of Trump’s favorable federal permit policies to build additional LNG export plants and pipelines over the next 12 months. See, Factbox of North American LNG export projects

TRAPPED GAS

Overall, the EIA projects U.S. gas output will climb from a record 103.6 bcfd in 2023 to around 113.5 bcfd in 2030, with most of that fuel going to meet soaring LNG export demand. Canada, meanwhile, will also supply an average of around 7.0 bcfd of pipeline gas to the U.S. over the next five years.

Even with LNG demand rising, the EIA projected total U.S. gas demand, including domestic consumption and exports, would only rise by around 1% per year on average from now through 2030, climbing from a record 111.5 bcfd in 2024 to about 120.3 bcfd in 2030. That slowing growth comes as domestic gas consumption slides from a record 90.5 bcfd in 2024 to around 89.6 bcfd in 2030, due mainly to declines in the amount of gas that power generators burn as renewable output rises. Some other energy analysts, however, expect U.S. power generators will burn more gas in coming years than the EIA forecasts to meet fast-growing demand for electricity from power-hungry data centers.

New pipelines and other infrastructure will be needed to transport the gas to market.

In the U.S. Northeast, capacity to transport gas will likely remain constrained, capping potential output growth there to just about 3 bcfd by the end of the decade unless more pipelines get built, according to East Daily Analytics analyst Jack Weixel.

“Accessing this dependable supply will require new pipelines and supporting infrastructure,” said Dennis Degner, CEO of Range Resources, one of the biggest U.S. gas producers with operations in the Marcellus and Utica. Several U.S. pipeline firms, including Kinder Morgan, Williams Cos and Energy Transfer, have already started to spend billions to build hundreds of miles of new pipe, including in the Northeast, to supply more gas for export and domestic demand.

(Reporting by Scott DiSavino in New York, additional reporting by Curtis Williams in Houston; Editing by Liz Hampton and Chizu Nomiyama )