North America’s LNG export capacity is on track to more than double by 2028, according to the most recent estimates from the U.S. Energy Information Administration (EIA). The U.S., Canada, and Mexico all have ambitious LNG project pipelines, with governments across the region viewing natural gas as a transition fuel that will be needed to meet the mid-term energy demand both regionally and globally.
North America’s liquefied natural gas (LNG) export capacity is expected to more than double between 2024 and 2028, from 11.4 billion cubic feet per day (Bcf/d) in 2023 to 24.4 Bcf/d in 2028, according to the EIA. This is based on the existing project pipeline across the region. The EIA expects the LNG export capacity to grow by 0.8 Bcf/d in Mexico, 2.5 Bcf/d in Canada, and 9.7 Bcf/d in the U.S. from a total of 10 new projects that are currently under development across the three countries. Five of these projects are being developed in the U.S., including Plaquemines Phases I and II, Corpus Christi Stage III, Golden Pass, Rio Grande Phase I, and Port Arthur Phase I.
The oil major Shell recently predicted that the global demand for LNG will increase by more than 50% by 2040. Several countries around the globe have included natural gas in their green transition strategies, as it emits less carbon than other fossil fuels and is more reliable than the most popular renewable energy sources – solar and wind. As several countries shift away from a reliance on coal and oil, the global demand for natural gas is expected to rise for several decades, before eventually falling as global renewable energy and battery storage capacity increases.
LNG Plans in the U.S.
In the U.S., three LNG export projects that are currently under construction are expected to commence operations and increase to full production by the end of 2025. Earlier this year, the EIA forecast that U.S. natural gas exports would grow by 6% to 13.6 billion Bcf/d in 2024 compared with 2023. Net exports are expected to increase even further in 2025, by an additional 20% to 16.4 Bcf/d.
Meanwhile, LNG exports are expected to increase by 2% in 2024 and a further 18% in 2025. Existing LNG export facilities are expected to achieve a similar utilization rate in 2024-2025 as seen in 2023, while other facilities will come online.
U.S. gas exports to Mexico are expected to grow significantly in the coming years, as several pipelines in Mexico—Tula-Villa de Reyes, Tuxpan-Tula, and Cuxtal Phase II connecting to the Energía Mayakan pipeline on the Yucatán Peninsula become fully operational within the next two years. Meanwhile, U.S. gas pipeline exports to Canada are expected to remain around the same as previous years.
A New LNG Export Market in Canada
Canada is currently developing its first LNG export facility. LNG Canada, a joint venture company between Shell, Petronas, PetroChina, KOGAS, and Mitsubishi, aims to soon commence operations at its LNG export terminal in Kitimat, Canada’s British Columbia.
This month, the company stated that all safety checks had been completed and it hopes to activate a small flare pilot at the vapor flare tower, before commencing low-level flaring over several weeks, ahead of more visible flaring. LNG Canada aims to ship its first cargoes of made-in-B.C. LNG by mid-2025 from the country’s first large-scale LNG export terminal.
Jason Klein, the CEO of LNG Canada, stated, “We expect to start commercial operations by the middle of 2025. The first LNG carrier to sail from our facility and down the Douglas Channel will supply made-in-B.C. LNG to our joint venture participants and their customers.” Klein added, “Direct benefits to the government over the life of the project alone will reach $23 billion, by the province’s estimate.”
Big LNG Plans in Mexico
In Mexico, President Andrés Manuel López Obrador (AMLO) has pursued an energy policy of nationalization, focusing on enhancing the country’s oil and gas power. The Mexican government announced the development of around seven private LNG export terminals at the beginning of the year, including the Mexico Pacific terminal in Chihuahua and the NFE terminal in Altamira.
New Fortress Energy’s Altamira plant in Tamaulipas is currently under construction and is expected to commence operations in the coming months. Sempra’s Energía Costa Azul plant at an existing LNG import terminal in Baja California is also under development.
Most of these terminals are expected to support the increase in U.S. LNG production. They will process and ship gas sent via pipelines from U.S. gas fields in the Permian Basin in Texas and New Mexico. Mexico has the advantage of having access to the Gulf, a major gateway to international markets.
As the U.S., Canada, and Mexico all increase their LNG export capacity, the North American region is expected to become a gas export powerhouse. This will support the anticipated increase in global demand for LNG in the coming decades. Although not everyone is so optimistic about this development, with climate activists concerned about the potential environmental impact of the ongoing dependence on fossil fuels, and others worried about a potential oversupply of LNG during a time of energy transition.
