The U.S. DOE approved the Golden Pass liquefied natural gas (LNG) export facility in late April for exports to non-free-trade-agreement countries. The facility slated for an export capacity of 2.2 Bcf/day of LNG got Federal Energy Regulatory Commission approval earlier. While investment is not finalized and there is no solid timetable for construction, it indicates the new administration’s view of LNG exports. The “America First” message touted during the campaign and the early stages of the Trump presidency led some to believe that future LNG export approvals would be tougher to come by, but at least for now, this does not appear to be the case. In issuing the approval, DOE Secretary Rick Perry alluded to more facilities getting the go-ahead in the future.

Golden Pass is on the Texas Gulf Coast and joins Sabine Pass, Cove Point, Corpus Christi, Cameron LNG, Freeport, Elba Island, Magnolia LNG and Lake Charles as projects receiving the required approvals from FERC and DOE. Jordon Cove, the pending West Coast export facility, has DOE approval, but has been tied up with environmental concerns for years. This facility, which would have more ready access to higher-priced Asian markets, appears to have gained some recent traction. Dominion’s Cove Point project, expected online before this year, is the first East Coast facility in the queue ahead of the Elba Island liquefaction project. The remaining facilities are all located on the Gulf Coast.

In addition to the roughly 2.2 Bcf per day of capacity already online at Sabine Pass, nearly 9 Bcf per day of capacity is currently under construction. The Magnolia LNG, Golden Pass, Lake Charles projects have not started construction, along with further expansions at Sabine Pass and Cameron. About 7 Bcf per day of capacity has been approved, but construction has not begun. Combined, approved exports total nearly 18 Bcf per day, which represents about 26 percent of current domestic supply. 

With LNG export capacity significantly ramping up over the coming years and a large percentage of that tied to long-term contracts, a major sea change in the U.S. market approaches. Not only will LNG exports bring to the table a significant demand sector that didn’t exist 14 months ago, but growing global connectivity will greatly increase the number of risk factors that impact U.S. consumers. North American natural gas will enter the global stage.