The US LNG industry experienced an up-and-down 2023 and 2024 will likely continue with more of the same.

Recently, there have been some changes to the LNG export landscape that have gained the industry’s attention and could make the 2024 export market outlook less robust than projected.

In 2023, natural gas deliveries to the US LNG export terminals mostly held at around 14 Bcf/d. While natural gas market bulls were hoping for a jump in LNG export capacity in 2024 that would boost the demand for feed gas, they may need to wait longer than expected for that new capacity to come online.

The LNG market in early 2023 was focused on the outage and restart of the Freeport LNG export terminal in Texas. The facility was partly brought back online in February 2023, following a June 2022 fire that closed the facility, shutting off roughly 2 Bcf/d of LNG export capacity.

In November 2023, the Federal Energy Regulatory Commission authorized Freeport to begin commissioning its second jetty. The agency okayed the company’s request to reactivate Phase II facilities, namely LNG Loop 2 and Dock 2, for ship loading, restoring the export facility to complete commercial operations. FERC, however, has yet to give the company permission to commission or reactivate LNG Tank 3.

In early December 2023, other LNG export project developers announced less welcome news on the scheduled start of their projects. Shortly before Freeport announced it had fully resumed operations, ExxonMobil on Dec. 6 said the start of operations at its 2 Bcf/day Golden Pass facility in Texas would be pushed back to 2025 from late 2024. In addition, Venture Global said its Plaquemines terminal in Louisiana, which will have a capacity of nearly 4 Bcf/d, would undergo an extended commissioning process. As a result, long-term cargoes from the facility aren’t expected to be delivered until at least 2026. Although some cargoes may be exported earlier, the delays will likely slow the expansion of LNG export capacity in the US.

The two plants were expected to contribute significantly to the overall LNG export growth over the next two years. Further, the market will be affected by the planned late May closing of the Everett LNG import terminal, which provides natural gas to the Boston area.

The terminal’s shutdown is directly linked to the expected loss of its largest customer, Constellation Energy’s 1,413-megawatt Mystic power station in Massachusetts. Constellation also owns the Everett terminal and has said it cannot continue to operate the import terminal once Mystic closes unless it can find another large customer.

There’s another, more uncertain, factor that could impact LNG exports in 2024 – the Atlantic hurricane season. While the 2023 season was well above average, a strong El Nino event helped to keep major storms from reaching the US Gulf Coast. Some longer-range forecasts are pointing to another above-normal season, accompanied by a La Nina pattern that is more conducive to the formation of tropical storms in the Gulf of Mexico. The Gulf Coast has been hit by some of the strongest hurricanes to have made landfall on the US and an above-normal season raises the potential threat to LNG export terminals. They also can upset export schedules as vessels must deal with loading and transport issues.