Texas LNG projects await 2nd wave of exports

The liquefied natural gas tanker Asia Vision left Cheniere Energy's Sabine Pass export terminal in Louisiana on Wednesday with the first cargo of U.S. shale gas. The carrier ship is shown Wedneday in an aerial photograph taken over Sabine Pass, Texas. (MUST CREDIT: Bloomberg photo by Lindsey Janies)
The liquefied natural gas tanker Asia Vision left Cheniere Energy’s Sabine Pass export terminal in Louisiana in February with the first cargo of U.S. shale gas. (Bloomberg photo by Lindsey Janies)

A global glut of liquefied natural gas is creating questions about when a “second wave” of LNG export projects will move forward after Cheniere Energy’s first shipments out of Louisiana this year.

Five U.S. LNG export projects are under construction, including in Freeport and Corpus Christi, but many are awaiting both regulatory approval and corporate decisions on whether to invest billions of dollars during a market downturn.

Perhaps the most brazen project is The Woodlands-based NextDecade’s Rio Grande LNG project in Texas. NextDecade proposes building what could be the nation’s largest LNG export facility, with the first of three phases scheduled to come online in 2020. The $6 billion project would be constructed on 1,000 acres at the Port of Brownsville near the Mexican border.

“We want to be the leader of the second wave of export projects out of the U.S.,” said NextDecade CEO Kathleen Eisbrenner, a former executive at Royal Dutch Shell before founding the company in 2010.

Many industry analysts and executives expect LNG demand to pick up after 2020 as countries reduce their reliance on coal, in part from international accords on climate change. The expansion of the Panama Canal, which will accommodate LNG tankers, will make Asian markets more accessible to Texas and other Gulf Coast exporters.

“It’s like a drug,” Eisbrenner said. “Once a country gets a taste of LNG they never want to go back.”

At HoustonChronicle.com, Eisbrenner details her firm’s project, and BP ehief economist Spencer Dale explains why many new LNG projects won’t be profitable right away.