The US LNG industry faces obstacles despite Trump’s support

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President Donald Trump ordered the cancellation of Chevron’s special licenses operating in Venezuela on Wednesday, working with the country’s authoritarian leader, Nicolas Maduro, to host a free and fair presidential election.

Analysts say the decision could be a harmful blow to Venezuela’s oil industry. Analysts say Chevron is a key supplier of diluents.

“The loss of the diluents that Chevron supplied is a big problem. It was a lifeline for their production,” said Schleiner Parker, an analyst at Reistad Energy, a consultant.

Meanwhile, my energy source colleagues Malcolm Moore and Tom Wilson reported on BP’s decision to abandon targets to reduce fossil fuel production and develop renewable energy. British Oil Major has also announced plans to increase oil and gas spending of between $5 billion and $10 billion a year, with signs that it has put pressure on activist investors Elliott Management after building a nearly 5% stake in the company.

Today’s energy sources take a closer look at the US LNG industry. President Donald Trump has used Super Chilled Gas as a negotiation tip and warns the EU that he must commit to purchasing “large” amounts of US oil and gas or customs duties. And on Wednesday he threatened to impose a 25% tariff on EU imports.

However, the expansion of the US LNG industry still faces challenges that could cause delays in projects.

Thank you for reading – Alexandra

Despite Trump’s support, obstacles are looming for our LNG industry

Donald Trump lifted the suspension on government permit approval and sparked enthusiasm for foreign leaders in Japan, India and Europe to liquefy our liquefied natural gas exports by purchasing more countries’ ultra-born fuels.

However, supporters of the proposed new LNG terminal project in North America still face challenges in navigating legal hurdles that could slow the White House plan to “unleash American energy control.”

This month, the U.S. Department of Energy approved federal LNG, lit by green, the first major export project, since former President Joe Biden imposed a freeze on LNG export licences to non-free trade agreements (FTA) countries last year. The project, backed by energy-focused asset manager Kimmeridge, will be built in Cameron, Louisiana, and will sign a client contract sufficient to raise the estimated $4.8 billion needed to build the terminal.

“We’ve been in line for over two years and I think it was unfair, so I’m glad to see the administration come in and act quickly. Our goal is (to make a final investment decision (FID) in early September,” Kimmeridge’s managing partner Ben Dell said in an interview with Energy Source.

He added that the Trump administration has created “good, positive momentum towards investment in infrastructure and energy,” but that not all US LNG projects will be completed.

“Depending on the environment and on the timing views, somewhere in all (projects) announced (there could be a step forward),” Dell said. “Part of that is merely a market situation and it changes over time.”

Analysts say the risk of a price drop could slow the expansion of the US industry, as there could be limited infrastructure that is not ready to respond to LNG oversupply, litigation and surges in demand. Already the world’s largest LNG producer, the United States faces competition from Qatar, where state-owned energy companies can move quickly to increase their normal supply.

“If (Trump) lights up all of these projects (Trump), it will probably be oversupplied globally,” said Mathieu, an analyst at Rystad Energy.

“Obviously, prices are falling and the profits of these LNG developers are not what they need to fund these projects, so we don’t want to supply them to the market,” he added.

Rystad Energy senses the risk of oversupply in the market in the mid-2030s. Similarly, JPMorgan expects the increase in capacity driven by Qatar and North America to fall in prices over the long term. Wall Street investment banks predict that the US will produce more than a third of its global supply by 2030.

“We are committed to providing a wide range of services to our customers,” said Shika Chaturvedi, Head of JPMorgan’s Global Natural Gas and Natural Gas Liquid Strategy.

Low prices could prevent producers from pursuing new projects that are becoming increasingly capital-intensive.

“Incentivizing US gas producers is becoming more and more demanding,” said Eugene Kim, research director at Wood Mackenzie, consulting firm. “The prices to encourage them have risen because they need a higher rate of return to spending capital.”

Some developers may face legal obstacles and other challenges that could slow the expansion of US liquefaction capabilities.

According to Laurent Ruseckas, research director at S&P Global Commodity Insights, “Developers face legal obstacles and challenges in ensuring adequate certainty over supply and off-takes, as LNG buyers seek to diversify supply projects that compete with their supply portfolios and competing supply projects.

Many in the industry want the predictability of regulations so that permits are not vulnerable to changes in management.

“Even post-FID projects may need to address legal challenges from environmental groups that could lead to delays,” Ruseckas said.

Despite the challenges, global demand for LNG remains strong. Shell is projected to increase by around 60% by 2040, driven primarily by economic growth in Asia.

However, signing the contract in the US was slower after the Biden administration received only one approval in 2024 on non-FTA export licences. Shell said that US LNG sales were slower after record contract signing between 2021 and 2023, bringing further growth from the country along with “risks” such as “risks” and “risks” such as construction costs.

The US is a key component of supplying enough LNG to the world, and while there is adequate supply, there is a problem of delivery potential.

“The US has no supply issues, there is a delivery possibility issue,” Kim said.

Potential constraints on pipeline infrastructure and storage capacity can challenge the timing and pace of expansion. In particular, interstate pipelines have been difficult to build in recent years due to state and public opposition.

“We have a robust interstate gas pipeline system already in operation, but we will clearly need more to meet the growing demand for natural gas,” said LNG Centre Charlie Reedl.

Analysts say LNG producers cannot rely on Trump’s tariff threats to encourage private industry customers to sign the long-term deals they need to help fund new terminals. If anything, tariffs increase uncertainty and act as a resistance to the sector, they say.

“Many world leaders want to offer Trump a victory to ease his tariff threat, but LNG trading is a troubling fit. Ben Cahill, director of energy markets and policy at the Center for Energy and Environmental Analysis, wrote in a column for the Barons.

Kimmeridge’s Dell said the company is still trying to understand the potential impact of tariffs on Commonwealth LNG.

“I’m not looking at anything now to change the way I see FID on a planned timeline,” he said. (Alexandra White)

Job movements

Zong Bo has been appointed Deputy Chief Financial Officer of ENN Energy.

Danlansky has been appointed Managing Director and Chief Executive Officer of AXP Energy

Lloyd Helms JR has been appointed to the Civitas Resources Board of Directors.

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The energy source has been written and edited by Jamie Smith, Miles McCormick, Amanda Chew, Tom Wilson and Malcolm Moore, with the support of FT’s global team of reporters. Contact us at Energy.source@ft.com and follow us on X at @ftenergy. Check out previous editions of our newsletter here.