LNG
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LNG's role as a key feedstock is well established as it helps manage both input costs and carbon emissions. Heavy industrial users' drive to achieve net zero targets has added a new dimension to how and where it is being deployed. Overall, its use is expected to increase and is tipped to become the strongest-growing fossil fuel.
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US LNG buildout to spur Permian-Haynesville competition
US LNG buildout to spur Permian-Haynesville competition
US midstream operators are striving to debottleneck key producing areas to unlock additional supplies to LNG export plants, writes Tray Swanson London, 5 November (Argus) — The scale of the planned buildout in US liquefaction capacity means new export projects in Texas and Louisiana will increasingly need to tap supply from the Permian and Haynesville shale basins. But higher production from both regions and more pipeline capacity out of the Permian will be required for the two plays to satisfy the additional feedgas demand. The US has about 17.5bn ft³/d (181bn m³/yr) of liquefaction capacity in operation and 15bn ft³/d under construction, following a spree of final investment decisions this year. More than half of this additional capacity is set to be commissioned by the end of 2028, which will require additional feedgas supplies of about 9.9bn-10.8bn ft³/d, assuming liquefaction losses of 10-20pc. US gas production may need to grow faster than currently forecast to meet this new demand. About 3.3bn-3.6bn ft³/d of additional feedgas demand is expected to come from new facilities this year, while total gas output in the US is expected to rise by 4.4bn ft³/d, according to the US Energy Information Administration (EIA). But just 2.8bn ft³/d of this year's new production will come from the Permian and Haynesville basins — the best positioned for supplying new Gulf coast facilities.The Marcellus and Utica basins in Appalachia — the biggest gas-producing region in the US — are less able to meet new feedgas demand, given high utilisation on pipelines connecting the basins with the Gulf coast and legal hurdles for building any new interstate pipelines . The Gulf coast market could tighten further next year, with about 2bn-2.2bn ft³/d of additional feedgas demand scheduled to come on line but only about 700mn ft³/d of additional gas output expected from the Permian and Haynesville basins. And even larger supply deficits are projected for the following two years, if projects stick to their scheduled timelines. But production in the Haynesville and Permian basins may be able to grow faster than current forecasts suggest, if infrastructure bottlenecks are removed. A growing network of pipelines is advancing in states with industry-friendly regulatory and permitting regimes, which could be used by Haynesville and Permian producers to ship their supply to the Gulf coast. The Permian is set to remain the fastest-growing gas-producing play in the US, with output expected to climb to 27.7bn ft³/d this year. Growth is forecast to slow to 2pc in 2026, bringing total output to 28bn ft³/d, according to the EIA. Bottlenecks have so far limited how much Permian gas can reach the Texas-Louisiana border, where nearly 11bn ft³/d of liquefaction capacity is being built. Negative energy The initial chokepoint is in the Permian itself, where natural gas is a by-product of crude oil production and is tied to the economics of crude rather than gas. This, coupled with limited pipeline infrastructure, has often led to negative gas prices at west Texas' Waha hub, leaving producers with little alternative other than to reinject gas into reservoirs or increase linepack — gas stored in the pipeline network. Such occasions have become more frequent since Texas regulators cracked down on flaring allowances in 2021. Tight pipeline capacity meant Waha prices sank to a record low of -$8.44/mn Btu in early October, when unplanned outages on westbound flows coincided with planned maintenance on eastbound flows. Midstream firms have plans to boost pipeline capacity out of the Permian. A total 9.1bn ft³/d of eastbound capacity is set to enter service in 2026-28, most of which will directly supply export facilities on the Gulf coast. Two projects will flow southeast to the Agua Dulce hub, which has tie-ins to US developer Cheniere's Corpus Christi terminal and fellow LNG exporter NextDecade's Rio Grande facility. A third new line will link to the Katy hub, west of Houston. Midstream firm Energy Transfer's 1.5bn ft³/d Hugh Brinson pipeline will ship Permian gas to the Dallas area, hundreds of miles from the coast, but that could free up more Haynesville supply to move south for export. There are further bottlenecks at the Katy hub, especially after Texas-based WhiteWater's 2.5bn ft³/d Matterhorn Express pipeline began shipping more Permian supply to Houston in October 2024. Less than 3bn ft³/d of pipeline capacity runs from Katy directly to the Gillis hub, north of Lake Charles, Louisiana — a key supply corridor for LNG terminals. But midstream operators plan to add 7.5bn ft³/d of capacity to the broader Texas-Louisiana LNG corridor by the end of the decade. The largest of the three projects may be in operation by the end of this year, even though flows are set to remain capped until LNG developer Venture Global's 4.4bn ft³/d CP Express pipeline begins service in 2027. Crude economics last year resulted in Permian gas flooding the regional market faster than new pipeline capacity could enter service. In contrast, Haynesville producers had to rein in output last year and into 2025 in response to oversupply in the US gas market that brought Henry Hub prices below their breakeven. Haynesville production fell sharply to 14.7bn ft³/d in 2024 from 16.4bn ft³/d a year earlier, as producers curtailed operations in response to the low prices. Higher prices allowed output to rebound to 15.1bn ft³/d in January-September and production is expected to average 15.2bn ft³/d over 2025 as a whole and 15.6bn ft³/d in 2026, according to the EIA. Breakeven costs in the Haynesville are about $3.50/mn Btu. Henry Hub prices on the Nymex 2026 calendar strip were at $4.13/mn Btu on 3 November. Gas output in the Haynesville could rise above the 2023 record after the completion of pipeline projects that will ship Haynesville gas south to the Gillis hub on the Louisiana coast. Two large projects started up in the second half of 2025. Permian impurities But the additional infrastructure from both basins will increase scope for competition between Haynesville and Permian producers and may also create issues for LNG terminals because the gas in each basin has different compositions. Permian supply tends to require more treatment to eliminate impurities compared with Haynesville gas, specifically nitrogen and heavy hydrocarbons. Nitrogen reduces gas' heating value and boiling point, meaning LNG terminals have to use more energy in liquefaction. Most pipelines allow for gas with nitrogen levels of about 3pc, but LNG facilities require nitrogen content to be less than 1pc. Such shifts in feedgas composition increase the amount of maintenance terminals require. Cheniere's 33mn t/yr Sabine Pass facility, on the Louisiana side of the Sabine River, has reported issues with nitrogen since the Matterhorn Express began tying in to interstate pipelines such as the Texas Eastern Transmission and Transcontinental systems. Sabine Pass has had to change its liquefaction process to accommodate higher nitrogen content and different solvents are required to clean heavy hydrocarbons from the terminal's heat exchangers, company executives say. The facility underwent planned three-week maintenance in June, its first major outage since the Matterhorn began service the previous year. Several planned LNG export plants will use nitrogen rejection units (NRUs) to purify the feedgas on site, including Venture Global's 28mn t/yr CP2 and compatriot energy firm Sempra's 27mn t/yr Port Arthur facilities. NRUs can cost about $100mn-150mn/1bn ft³ of gas treated, market participants say. But the process typically emits less methane than other methods of nitrogen removal — a key distinction for US exporters seeking to further expand their share of the European market, given the EU's plans to regulate methane emissions of imported gas. Haynesville pipeline projects bn ft³/d Project Developer Capacity Destination Date LEG Williams 1.8 Gillis 2025 NG3 Momentum 1.7 Gillis 2025 LEAP phase 4* DT Midstream 0.2 Gillis 2026 Pelican WhiteWater 1.8 Gillis 2027 Total 5.5 *overall capacity at 2.1bn ft³/d — regulatory filings, company press releases, EIA Katy pipeline projects bn ft³/d Project Developer Capacity Destination Date Trident Kinder Morgan 1.5 Port Arthur 2027 Blackfin WhiteWater 3.5 Port Arthur 4Q25* Mustang Express ARM Energy 2.5 Port Arthur 2028-29 Total 7.5 *flows limited until Venture Global's CP Express begins in 2027 — regulatory filings, company press releases, EIA Permian pipeline projects bn ft³/d Project Developer Capacity Destination Date Blackcomb WhiteWater 2.5 Agua Dulce 2026 Hugh Brinson* Energy Transfer 1.5 Dallas area 2026 GCX Kinder Morgan 0.6 Agua Dulce 2026 Apex† Targa 2.0 Port Arthur 2027-28 Eiger Express WhiteWater 2.5 Katy 2028 Total 9.1 *second phase could add 700mn ft³/d, †approved but not under construction — regulatory filings, company press releases, EIA US output, year-on-year change bn ft³/d Permian and Haynesville basins infrastructure Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
US high court questions Trump's tariff powers
US high court questions Trump's tariff powers
Washington, 5 November (Argus) — President Donald Trump's legal rationale for tariffs targeting major US trading partners ran into a skeptical review during a Supreme Court hearing on Wednesday, including from the justices appointed by him. The high court heard an appeal of two decisions by lower courts that found Trump's administration has overstepped its authority by placing emergency tariffs on most goods imported into the US. Trump has cited a 1977 law called the International Emergency Economic Powers Act (IEEPA), which previous presidents only used to impose targeted economic sanctions, to impose tariffs on all US trading partners. IEEPA omits references to tariffs. But the Trump administration justifies imposing them by citing two words in the text of the law — that "regulation" of "importation" is among the possible measures that the president can take to address an economic emergency. Tariffs are a foreign policy issue, which the Constitution delegates to the executive branch, solicitor general John Sauer argued on behalf of the administration. Tariffs are not a tax but a regulatory tool, Sauer said. The revenue from tariffs is incidental to the exercise of Trump's regulatory power in foreign policy domain, Sauer said. Both liberal and conservative justices challenged those arguments. Trump's reliance on a law never before used to impose tariffs raises the "major questions doctrine", said Chief Justice John Roberts, a conservative. Roberts was referring to recent Supreme Court decisions, which state that it is up to Congress to decide prominent questions of economic significance. The president has a constitutionally granted authority over foreign policy but in this case, he exercised it by imposing "taxes on Americans, and that has always been the core power of Congress," Roberts said. The possibility that future presidents would use tariffs to advance unrelated policy priorities featured prominently in questions from the bench. "Could the president impose a 50pc tariff on gas-powered cars and auto parts to deal with the 'unusual and extraordinary threat' from abroad of climate change?", conservative justice Neil Gorsuch asked. Sauer acknowledged that the scenario was "highly likely", albeit not under Trump, as "this administration would say 'that's a hoax.'" The legal argument advanced by Trump means that former president Joe Biden could have declared a climate emergency, imposed tariffs and then used the tariff revenue for his student loan relief program, liberal justice Sonia Sotomayor said. "That's all Biden would have had to do with any of his programs." Gorsuch also challenged the government's argument that Congress can at any time remove the power of the president to impose tariffs under emergency authorities. "Congress, as a practical matter, can't get this power back once it handed it over," Gorsuch said. An extension of presidential powers can be enacted with a simple majority but has to be removed by a veto-proof majority, Gorsuch said. "It's a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people's elected representatives." The legal cases before the court pit the Trump administration against a group of private companies and, separately, a coalition of states, who argued that IEEPA does not explicitly authorize Trump to use the tariffs he imposed. Conservative justice Brett Kavanaugh indicated that he would be open to defending the presidential authority to impose tariffs in at least some specific emergency situations, citing Trump's imposition of a 25pc tariff on imports from India in a bid to stop Indian purchases of Russian oil. Next steps The Supreme Court could take weeks, if not months, to make a decision. Trump's preferred outcome is for the high court to overturn the lower courts' decisions and keep the tariffs he imposed in place. "With a Victory, we have tremendous, but fair, Financial and National Security," Trump posted ahead of the hearing. "Without it, we are virtually defenseless against other Countries who have, for years, taken advantage of us." If the Supreme Court decides to keep the lower courts' decisions in place, Trump's administration would have to immediately lift the so-called "fentanyl" tariffs affecting Canada, Mexico and China and the so-called "reciprocal" tariffs of 10pc and higher, in place since 5 April on nearly every US trading partner. The courts' decisions will not affect tariffs Trump imposed on imports of steel, aluminum, cars and auto parts, as the administration has used other, unequivocal legal trade authorities. The Supreme Court would separately have to decide what to do about the revenue collected from emergency tariffs. One of the lower courts ordered that the defendants who challenged tariffs in courts must receive refunds, while another court ordered that all importers must receive refunds. The US government's tariff revenue ran at about $30bn/month as of August, according to an estimate by the Federal Reserve Bank of New York. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
EU LNG imports at record high in Oct
EU LNG imports at record high in Oct
London, 5 November (Argus) — LNG deliveries to Europe in October were the highest ever for that month, while rising LNG Atlantic-basin loadings could boost November imports even higher. Firms delivered 10.7mn t of LNG to European terminals last month, the highest ever for any October and up from 8.66mn t in September, ship-tracking data from Kpler shows. Deliveries were above the 10mn t registered in October 2022, when importers scrambled to secure additional supply ahead of winter following the curtailment of Russian pipeline flows. The Netherlands continued to be Europe's largest importer at 1.68mn t. France came in second at 1.65mn t, despite strikes disrupting operations at Elengy-operated terminals, especially in the first half of the month. And Spain was the third-largest destination for LNG, with 1.61mn t. Those imports were partly destined to build the country's LNG stocks ahead of the peak winter demand, although Spanish terminals might have also received deferred cargoes that could not deliver to France because of the strikes. The stockfill at Spanish tanks rose to 67pc of capacity on 4 November from 56pc on 1 October. The ramp up in LNG deliveries bolstered EU LNG sendout to 4.2 TWh/d in October from 3.9 TWh/d in September and 2.9 TWh/d a year earlier. Fast regasification contributed to limit storage withdrawals during cold spells and periods of limited wind and solar output throughout last month. Record-high Atlantic-basin loadings in October could boost LNG deliveries to Europe in November despite the inter-basin arbitrage for sending US fob cargoes to Asia opening briefly around mid-October. LNG loadings from export terminals in the Atlantic reached a record high of 14.83mn t of LNG — up from 12.50mn t in September — sustained by quicker exports from Plaquemines and Corpus Christi in the US and Bonny in Nigeria. Some of those volumes could be directed to east of the Suez Canal after the inter-basin arbitrage opened for some market participants around mid-October for the first time since June. But the incentive to deliver Atlantic supply to Asia has waned since then, as higher charter rates, having doubled over the last two weeks, are making longer journeys to Asia uneconomical. By Isabel Valverde Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Q&A: India’s Gail bullish on LNG, flags price risks
Q&A: India’s Gail bullish on LNG, flags price risks
Abu Dhabi, 4 November (Argus) — State-controlled gas distributor Gail is optimistic about India's gas market, with chairman Sandeep Kumar Gupta noting strong demand growth in both conventional sectors and emerging industries such as data centres, although challenges around taxation and price sensitivity remain. Speaking to Argus on the sidelines of the Adipec conference in Abu Dhabi, Gupta also discussed other LNG market trends and expansion plans at the Dabhol LNG terminal. Looking ahead, how do you see India's LNG demand evolving in the short and long term? We are very positive about the potential for gas consumption, both in conventional sectors and emerging areas such as steel, cement, refineries, petrochemicals, and increasingly, data centres. There is significant growth potential. But India remains a highly price-sensitive market, which has not made good headway in gas consumption in the power sector, which could otherwise be a major consumer. Ultimately, growth depends on both pricing and taxation support. Currently, gas is not included under the goods and services tax (GST), and the largest consuming sector after fertilizers is City Gas Distribution (CGD), where [compressed natural gas] CNG is still taxed at 14pc on compression. If taxation reliefs were implemented and gas were brought under GST, the cost of CNG would fall. If that happens, we are sure that there will be a huge uptick in gas demand in the country. There are reports about India planning to scrap tax on LNG imports from the US. How does Gail view that potential policy change? It would certainly be a very positive development for Gail, as we currently import around 5.8mn t/yr of LNG from the US. Such a move would benefit not only Gail but also the country as a whole. That said, this remains subject to bilateral discussions between the two governments, and I am not certain about the current stage of that development. Is Gail interested in buying LNG from the Alaska LNG project in the US? We are examining the possibilities but it's a challenging project. Both the terminal and the north–south pipeline in Alaska need to be developed. Ultimately, it boils down to commercial viability, if the economics are favourable and if there is demand to support that, we would definitely consider it. We are continually evaluating multiple geographies based on India's LNG demand growth, and Alaska could be one of the potential sources. What are the short-term operational targets for the Dabhol LNG terminal? The terminal has a rated capacity of 5mn t/yr. Initially, it could not operate at full capacity because the breakwater facility was incomplete. That has now been finished, making it an all-weather terminal. But we currently do not have our own heating system — we had been relying on the nearby RGPPL [gas-fired power plant] for the heat required to gasify LNG. We are now installing our own heating facility, and by the end of next year, we expect to operate the terminal at its full 5mn t/yr. Would you say India is heading towards LNG oversupply? With new LNG supply coming from the US and Qatar from 2027 onwards, supply will certainly rise. But both in India and globally, we expect strong demand growth, not only in conventional sectors but also in emerging areas such as data centres. Gas-fired power will continue to play an important role, despite the growth of renewables. Overall, we believe that gas demand will keep pace with the increasing supply. How do you view the shift in LNG pricing from crude-linked contracts to US indexes such as Henry Hub? Our portfolio includes both types of linkages, Brent-linked as well as Henry Hub-linked contracts, so it is balanced. While we have exposure to US gas prices, we cannot predict how Henry Hub prices will evolve in the future. With increasing demand from export terminals, there is some uncertainty about how comfortable Henry Hub pricing will remain over the long term. Does Gail have any new long-term LNG agreements in the pipeline? We have recently signed two contracts, with Vitol and Adnoc, with supply expected to begin next year. Depending on how gas demand develops in the country, we will adjust and potentially increase our imports from various countries, without overly focusing on any one supplier or suppliers. By Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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