US LNG developers brush off tariff concerns

The US' biggest LNG developers have little worry over potential costs from President Donald Trump's 25pc steel and aluminum import tariffs as they prepare to spend billions building new export infrastructure.

The top exporters of US LNG so far in 2025 — Cheniere, Venture Global and Sempra — are pushing ahead with plans for new terminals and expansions, dismissing concerns that Trump's protectionist trade policy could throttle projects that would help add more than 80mn t/yr (12bn cf/d) of capacity to the world's largest supplier of LNG by 2030.

Sempra and Venture Global both estimate that just 1pc of capital expenditure for the first phases of their respective Port Arthur and CP2 projects is exposed to tariffs. Sempra plans to spend $13bn on the 13.5mn t/yr first phase of the Port Arthur, Texas, project. Venture Global expects to spend $27bn-28bn on both phases of the 28mn t/yr CP2 plant in Louisiana, but has yet to reach a final investment decision for phase 1.

About 90pc of the Port Arthur project's spending is with domestic suppliers and contractors, Sempra chief executive Jeffrey Martin told investors in an earnings call on 8 May, with steel for the first liquefaction train fully sourced in the US. The two-train first phase is expected to have its trains on line in 2027 and 2028.

Disruptions during the Covid-19 pandemic had already forced the company to identify and adapt to risks in the supply chain.

"We expect those diversified sources to help us better manage and mitigate tariff risks," Sempra chief financial officer Karen Sedgwick said. She later added that the firm preemptively began importing materials for Port Arthur LNG into a foreign trade zone in February, a tactic that can reduce or delay duties payments.

Neither of Venture Global's existing 12.4mn t/yr Calcasieu Pass and 27.2mn t/yr Plaquemines plants in Louisiana faces tariff risks, chief executive Mike Sabel told investors on 13 May. But up to $350mn of materials in the 20.2mn t/yr first phase of CP2 are subject to duties. The 26 prefabricated trains in phase 1 are being built in Italy and represent the largest exposure (see table). Venture Global expects 12 of those trains to arrive in Louisiana by the end of the year.

Inflation and high interest rates represent a bigger threat, Sabel said, calling it "probably the toughest environment to build our projects since the 1970s".

"It's something we work and live every day because of the scale of construction we're doing," said Sabel, whose company has 73.8mn t/yr of capacity in development.

Sempra expects to make a final investment decision on the 13.5mn t/yr second phase of Port Arthur LNG by the end of 2025. Venture Global is eyeing a decision on CP2's first phase by mid-2025.

‘Our best salesmen for US LNG'

Cheniere, the largest LNG exporter in the US, faces no tariff risks at its 11.45mn t/yr Corpus Christi, Texas, stage 3 expansion. The seven-train project "is basically complete", chief executive Jack Fusco told investors on 8 May, with all materials on site and construction ongoing. The company expects to have the first four trains producing LNG by the end of the year and plans to reach an investment decision this year to add trains 8 and 9.

The largest portion of spending for those trains will be on labor, and "a fair amount" of equipment and materials will be sourced domestically, limiting tariff exposure, Fusco said. The company has already spent $500mn in early procurement.

Cheniere also plans to jump on what it sees as a friendly permitting window under the Trump administration and add about 17mn t/yr to its existing 33mn t/yr Sabine Pass plant in Louisiana.

Fusco said he has been meeting with administration officials in Washington to discuss trade issues and how LNG fits in Trump's energy agenda.

The first Trump administration "were some of our best salesmen for US LNG, and that's continued during the president's current administration", Fusco said.

Since taking office in January, Trump's administration has worked to buttress the US LNG industry, quickly ending the Biden administration's pause on issuing licenses to export to countries that do not have free trade agreements with the US and making it easier for projects to receive extensions for such licenses.

But the new projects by Cheniere, Venture Global and Sempra may benefit from having already been in at least preliminary development when Trump unveiled the metals tariffs in February. For developers in earlier phases who are just now procuring supplies, "it's a different story", Alex Whittington, director of international affairs at Cheniere, told a conference in April.

By Tray Swanson