Texas and Louisiana are gearing up for a significant increase in liquefied natural gas (LNG) export capacity, with over 11 billion cubic feet per day (Bcf/d) of additional capacity planned by 2028. This expansion will require the development of new pipeline infrastructure to transport gas from the major supply basins, the Permian and the Haynesville, to coastal LNG terminals. However, there are concerns that the pace of production growth in these basins may not keep up with the growing demand for LNG as new terminals come online.

In Louisiana, LNG exports are set to rise faster than production in the state, while in Texas, the pace of production growth generally matches the combination of LNG and Mexico exports. However, as new LNG terminals begin operation, Texas may need to import more gas from Oklahoma or send less to Louisiana to meet demand.

The magnitude of these changes is enormous, with a slew of new LNG export terminals planned and rising gas production in both the Permian and the Haynesville. However, there are challenges to overcome, including the need for new pipeline projects and addressing the impact on price differentials and gas sourcing strategies for LNG exporters.

To navigate these changing dynamics, experts are using a natural gas flow/capacity model called Arrow. This model will help assess the market conditions and inform decision-making regarding pipeline infrastructure and gas sourcing strategies.

Overall, the Gulf Coast's readiness for the expansion of LNG exports will have a significant impact on the global LNG market and the future of the industry.

Sources:

- Housley Carr, "Texas, Louisiana Face Dynamic Changes In LNG Markets," RBN Energy, January 26, 2024.

- "Amid LNG's Gulf Coast expansion, community hopes to stand in its way," Energy News Network, January 24, 2024.

- "Outlook 2024: US LNG - The next wave?," Argus Media, January 25, 2024.