U.S. LNG Export Growth Faces Financing Constraints

A new S&P Global Energy forecast estimates the world will face a shortfall of at least 135 million metric tons of LNG between this year and 2034, equal to nearly one-third of global pre-war production. The shortfall follows the effective closure of the Strait of Hormuz and heavy damage to Qatar’s Ras Laffan terminal.

U.S. gas has risen because of the war and global electrification efforts. He added that domestic producers now view overseas markets as the main avenue for growth.

Souki stated that private equity firms face difficulty funding new LNG terminals because many projects now rely on spot-market sales rather than long-term contracts. He described the current environment as capital-constrained. A May survey by consulting firm Campbell Lutyens ranked investor appetite for LNG projects in the middle of 20 energy subsectors.

Ben Dell, co-founder of Kimmeridge and chairman of Commonwealth LNG, said raising capital for LNG projects remains extremely difficult.

Souki’s current company, Phoenix Energy, focuses on gas drilling and domestic pipelines rather than new export terminals. He said he has decided against taking the company public. U.S. gas exports while noting the process will involve hesitation and pain.