US tariffs and potential port fees on Chinese ships are creating uncertainty for US LNG projects that are looking to reach final investment decisions (FIDs) in 2025-26, and this could prompt potential buyers to look for non-US projects with similar timelines.
Project developers need to recalculate their costs in the face of the new tariffs on US imports, which may delay planned FIDs for 2025-26 and expected commissions towards the end of this decade (see table). Planned US LNG projects that expect to reach a financial close by the end of 2026 amount to close to 71mn t/yr, constituting the second wave of LNG exports in the late 2020s, after Qatar's massive expansion, to come on line in 2026. The total capacity would increase to 89mn t/yr if planned projects in Mexico with US feedgas are included (see table).
And the US' new port fees on non-US vessels has compounded concerns for shipowners and LNG firms. US exporters need to aim to export 15pc of their output on US-built, US-flagged and US-operated vessels by 2047, starting from 1pc in April 2028. Exporters' licenses could be revoked if terminals do not comply with this regulation. US LNG carriers are likely to be much more expensive than LNG carriers built elsewhere, market participants said, and the requirement for US LNG carriers could raise the overall costs of US projects.
Despite the exemptions on LNG vessels, shipowners, charterers and LNG buyers are likely to start considering the political risks before making commercial commitments, either for vessel chartering or for commodity purchases, for 10-20 years, market participants said.
And it could take about 10 years before US shipbuilding capacity builds up sufficiently to start constructing LNG vessels, market participants familiar with the matter told Argus.
Options beyond the US
Many LNG importers have started to reconsider non-US LNG projects, despite their respective difficulties, given the cloud of uncertainty shrouding the US' trade environment in the coming years.
Outside of Qatar, Mozambique has seen the greatest number of proposals for LNG projects, although development in the country faces multiple threats. The government on 9 April approved Italian energy company Eni's 3.4mn t/yr Coral North floating LNG project. And the Export-Import Bank of the US again approved a loan for the 13.1mn t/yr Mozambique LNG project, led by TotalEnergies. The project could start operations in 2029-30, according to TotalEnergies, if construction can resume in the first half of this year.
ExxonMobil expects to reach an FID on its 18mn t/yr Rovuma LNG export project, also in Mozambique, in early 2026, with commission likely to start in the early 2030s.
Norway's Equinor is also leading a 10mn t/yr Tanzania LNG project in eastern Africa, aiming for an FID in 2025 and production towards the end of this decade.
And many Canadian LNG projects are also unsold, with the 14mn t/yr LNG Canada phase 2, 12mn t/yr Ksi Lisims and 3.3mn t/yr Cedar phase 2 projects all having unsold capacity.
Continued interest in US projects
But US LNG projects this month have continued to add equity partners and sell through long-term agreements because US projects are still more likely to reach FID than other exporters with planned projects, market participants said.
NextDecade's Rio Grande LNG in south Texas and Woodside's Louisiana LNG have signed long-term deals with buyers in recent weeks. Woodside also sold 40pc of the project to US-based investment firm Stonepeak. And Lake Charles LNG and Commonwealth LNG have sold stakes to foreign investors this month as these projects progress toward FIDs.
Buyers may look to narrow their trade deficit with the US by boosting their imports of US LNG. Many Asian countries — Japan and Thailand, for example — have shown interest in buying more US LNG on a long-term basis since US president Donald Trump announced the tariffs earlier this month.
LNG projects in other countries such as Mozambique and Argentina face their own sets of risks, including political instability and challenges attracting investment, shipping firm Flex LNG board member Susan Sakmar told Argus.
"Buyers should ask themselves who do they think can get a project off the ground, and when and whom do they think will be a reliable supplier over the long term? So far, the US and Qatar are the leaders in this regard, and I think they will continue to lead after this bit of market uncertainty is behind us," she said.
| LNG projects awaiting FIDs | mn t/yr | |
| Name | Developer | Planned capacity |
| US LNG | ||
| Delfin FLNG | Delfin | 13.2 |
| Texas LNG | Glenfarne | 4.0 |
| CP2 | Venture Global | 28.0 |
| Corpus Christi 8-9 | Cheniere | 3.3 |
| Louisiana LNG | Woodside | 16.5 |
| Cameron train 4 | Sempra | 6.8 |
| Mexican LNG project | ||
| Energia Costa Azul | Sempra | 3.3 |
| Saguaro | Mexico Pacific | 15.0 |
| — Firms | ||
