Project Developments Chug Along in Wake of LNG Pause

President Joe Biden’s LNG pause died the day he left office, ending a frustrating 12 months for the people with project permits left on ice.

LNG companies said the pause left them scrambling. Some investors who had already signed supply agreements did not like waiting for a go-ahead. Some potential customers hesitated to buy in.

“When we talk to our international customers, we tell them they won’t have to worry about a petro-dictator suddenly shutting off their energy supply,” said EQT CEO Toby Rice at the RealClear 2024 Energy Future Forum in September. “American LNG comes from thousands of providers, driven by market forces, not political forces.”

The White House implemented the pause in January 2024. The Department of Energy (DOE) stopped distributing permits allowing LNG producers to sell to countries without a free-trade agreement with the U.S. to allow time for an environmental and economic study on the facilities.

The pause wasn’t bad for everyone. The gas market had little reaction to the news; the rule change would not affect any project scheduled to come online before 2028.

Two new LNG export projects, Venture Global’s Plaquemines and Cheniere Energy’s Corpus Christi 3, began production, becoming the eighth and ninth LNG export terminals to ship cargoes as 2025 started.

Energy trade organizations and some of their political allies made the pause an issue in the 2024 elections.

President Donald Trump promised to end the LNG pause on his first day in office, and one of his first executive orders, “Unleashing American Energy,” rescinded the DOE’s order and demanded federal agencies move faster to approve energy infrastructure.

The Center on Global Energy Policy published an analysis finding that 17 LNG projects were theoretically affected by the Biden policy, but only four—Venture Global’s Calcasieu Pass 2 (CP2), Delfin LNG, Lake Charles LNG and Commonwealth LNG—were of note during the pause because of how far they had advanced commercially.

The four projects combined have signed for more than 20 million tons per year (mtpa), near 40% of their expected capacity, according to the Center on Global Energy Policy. None of the projects have reached a final investment decision (FID).

“It is safe to assume that this capacity is unlikely to see the light of day before 2028, based on the typical time it takes to build a greenfield unit, with the possible exception of CP2, given its modular design and track record of faster delivery,” said Ira Joseph, senior research associate for the Center on Global Energy Policy in the analysis.

Here’s a roundup of how the major, advanced LNG projects without DOE approval fared during the pause and since.

Commonwealth LNG

Soon after taking office, the Trump administration made sure the public was aware of progress on LNG projects. On Feb. 14, Energy Secretary Chris Wright announced that the LNG project slated for Cameron Parish, Louisana, had received a conditional non-FTA permit from the DOE.

“Today marks one of many steps that DOE will be taking to assure our future as a reliable energy supplier to the world and resume regular order to our regulatory responsibilities over natural gas exports,” said Wright, the former CEO of Liberty Energy.

The DOE plans to award final authorization before the end of the year, and executives are expecting a final order from the Federal Energy Regulatory Commission (FERC) in July.

Kimmeridge-owned Commonwealth LNG originally planned to make FID on the project in first-quarter 2024. After the pause was announced, the executives moved it back to September 2025.

In November, the company applied for MiQ certification, which the company said will show its commitment to net-zero emissions. When it reaches full capacity, Commonwealth will be able to export the equivalent of 1.2 Bcf/d of natural gas.

Delfin

The Delfin Floating LNG (FLNG) project received its own clause in Trump’s executive order.

The facility, to be located about 40 miles south of the Florida coast, had to go through the U.S. Maritime Administration (MARAD) for its permit. The company applied for a deepwater port license in 2015, and the license was approved in 2017.

However, construction and COVID delays held up development, and in April 2024, MARAD demanded an amended application for the project, contending that changes in the design required the update.

The issue caught the attention of Sen. Ted Cruz (R-Texas), who brought the project up during the nomination hearing for Transportation Secretary Sean Duffy. Cruz accused the Biden administration of forcing Delfin to “start its application from scratch” after “slow-walking it for five years.”

A clause ordering MARAD to speed previously approved FLNG projects was inserted into Trump’s order.

The order read, “the Administrator of the Maritime Administration (MARAD) shall, within 30 days of the date of this order and consistent with applicable law, determine whether any refinements to the project proposed subsequent to the ROD are likely to result in adverse environmental consequences …”

Delfin FLNG will have a capacity of about 1.8 Bcf/d when completed. The company has not given a date for an FID, but plans to be operational by 2029.

Lake Charles

Energy Transfer’s Lake Charles LNG continues to sign customers as it awaits a decision from the DOE.

“We continue to make progress toward full commercialization of this project, which we believe and many of our customers believe is the most compelling LNG project on the Gulf Coast,” said Energy Transfer Co-CEO Tom Long during the company’s fourth-quarter earnings call in February.

In December, Energy Transfer announced a 20-year LNG sale and purchase agreement to supply 2 mtpa to Chevron U.S.A.

At the same meeting, Co-CEO Mackie McCrea said he was expecting an FID sometime in the fourth quarter.

Energy Transfer has been through a contentious process with the DOE on the Lake Charles project. The COVID pandemic slowed contractors, keeping them from completing their work in 2024 as scheduled and forcing the company to request an extension on their approved permit. The DOE refused.

Energy Transfer has made several appeals, and the DOE currently lists the FTA permit as under review.

Long has told investors that he expects positive results from the government following the election of Trump.

Calcasieu Pass 2 (CP2)

Venture Global’s massive CP2 project was frequently cited when rumors began to circulate that the Biden administration was considering a pause.

On Jan. 20, the New York Times reported that the White House directed the DOE to “widen its review of the CP2 project to consider the terminal’s influence on climate change.”

With a capacity of 3.96 Bcf/d, CP2 is the largest of the proposed LNG facilities currently under review, and would be the second-largest facility in the U.S.

While waiting for a DOE post-pause decision, the project cleared a legal hurdle with FERC in early February. The commission released a draft environmental report, as ordered by the Court of Appeals for the D.C. Circuit.

In November, the appeals court requested that FERC create a supplemental environmental impact assessment for the project. FERC responded that the project met all of its recommendations and returned it to the court for a final ruling. The FERC gave cleared the project for construction in March—after another back-and-forth from environmental reviews.

Like most LNG projects, environmental groups have filed lawsuits against CP2 seeking to halt its development. According to the company’s website, CP2 is in the advanced stage of engineering, with major procurement work underway.

RELATED

Venture Global LNG’s Calcasieu Pass 2 Gets FERC Go-Ahead

US Regulators Greenlight Construction of Venture Global CP2 LNG Plant, Again

Demand developing

It took 30 months from FID for Venture Global’s Plaquemines LNG to send its first cargo. By that measure, it would appear likely to take at least until the latter half of 2028 before any of the four projects come online.

However, several analysts said they expect more U.S. LNG to be needed on the international market than is currently planned for.

“One might take comfort in the fact that there is roughly 200 mtpa of pre-FID capacity outside the U.S. that can plausibly fill a supply gap,” said Akos Losz, a natural gas market analyst, writing for the Center on Global Energy Policy. “However, 40% of this capacity is located in Russia (hit by Western sanctions), 15% in East Africa (plagued by above-ground issues) and another 15% in Mexico (subject to DOE jurisdiction as projects take feedgas from the U.S.).

“In reality, U.S. LNG does not have many easy alternatives, unless Qatar decides to undertake further expansion rounds.”

East Daley Analytics predicts that natural gas production will have to play catch-up to LNG demand by the end of the year.

“In our view, the market is not sending a strong enough signal to incentivize enough new supply from producers to meet growth in LNG demand,” said analyst Alex Gafford.