US LNG exports in troubled waters

The United States is expected to start exporting LNG from the Gulf of Mexico within weeks. The first shipment from Cheniere’s Sabine Pass Train 1 is likely in late February or early March. However, US LNG projects are bracing themselves for a glutted market that shows little sign of tightening in the coming years. While this has the potential to improve liquidity in the spot market, it also means a significant proportion of US LNG export capacity will remain underutilised until at least 2020.

There are five US LNG export projects in various stages of construction on the Atlantic coast: Sabine Pass, Corpus Christi, Freeport LNG, Cameron LNG and Dominion Cove Point. These projects are expected to add 80 mtpa of LNG export capacity by the end of 2020. The 16.5 mtpa Lake Charles project has also received authorisation to begin construction. It is likely to take an FID in 2016.