In Gas-Starved World, Two Massive US LNG Plants Start Construction

Two giant projects that will allow the US to send more of its shale gas overseas are inching forward. 

Sempra recently issued a so-called limited notice to proceed to its contractor Bechtel, which clears the way for the early stages of construction to begin at its Port Arthur liquefied natural gas project in Texas. NextDecade Corp. issued a similar notice to Bechtel for its Rio Grande LNG project, also in the Lone Star State, a document seen by Bloomberg shows. 

They are small but symbolic -- and politically significant -- steps as Russia’s war in Ukraine has wiped out global gas supplies and made buyers in Europe and Asia more dependent than ever on the US for the fuel. American gas companies have been working for years on multibillion-dollar LNG terminals to help bring US shale supplies overseas, but so far only a handful of terminals have been able to reach a point at which they’re sending regular shipments abroad. 

Even with construction beginning, the Port Arthur and Rio Grande terminals are still likely four years away from their first exports. 

Sempra and NextDecade didn’t immediately respond to requests for comment. Bechtel, who is listed as a contractor for both of the companies’ projects in public documents, declined to comment. 

The notices were issued after both companies signed supply deals with overseas buyers, but they must still secure billions of dollars to finance the projects. Port Arthur LNG has so far sold nearly three-fourths of its production mostly to European buyers while Rio Grande LNG has locked in mostly Asian buyers for three-fourths of the production for its first two units at its complex. 

Sempra had previously said that it was looking at issuing a limited notice to proceed on or before Nov. 15. NextDecade had recently told regulators that it planned to begin the process of clearing the project site this month.