U.S. LNG Upside Seen Limited by Pipeline Capacity Constraints

U.S. LNG producers have had the busiest year signing up new customers since before exports began from the Lower 48 in 2016, but additional pipeline capacity and natural gas production will be needed to send more of the super-chilled fuel overseas.

While the United States easily has the world’s largest backlog of near-shovel-ready liquefied natural gas projects, takeaway constraints remain a hurdle to getting more of the facilities built. 

This year alone, five developers have signed over 20 long-term deals to supply more than 30 million metric tons/year of LNG, or roughly 4 Bcf/d, to gas-thirsty buyers in Asia and Europe. Cheniere Energy Inc., the largest U.S. LNG exporter, said earlier this month it’s had the most active year for contracting since 2011.

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