U.S. Energy Department Approves Final Authorization for Port Arthur LNG Phase II

The U.S. Energy Department on May 29 approved a final authorization for liquefied natural gas (LNG) exports to non-free trade agreement (non-FTA) countries from Port Arthur LNG Phase II, Texas. This is the first final LNG export approval under U.S. President Donald Trump’s authority and outlines a significant step in reinstating LNG export permits, reversing the Biden administration’s hiatus and delivering on the recent executive order titled “Unleashing American Energy,” which seeks to promote the development of domestic energy resources.

The approval follows the department’s conclusion of its 2024 LNG export study. The updated study, following a comment period, finds that LNG supports the U.S. economy, strengthens relationships with trading partners and allies, and enhances national security.  The department’s analysis finds that the U.S. has a strong natural gas supply that is adequate to fulfill increasing levels of exports while abating impacts to domestic prices, and increasing LNG exports elevates U.S. GDP and creates job opportunities while improving the nation’s trade balance. Moreover, higher U.S. LNG exports increase domestic and international global security with no apparent effect on global greenhouse gas emissions, according to the study.

U.S. LNG export profitability has significantly increased since the Russian invasion of Ukraine and the corresponding impact on global gas prices. The Russian invasion of Ukraine led to a structural shift in the market, which has impacted trading dynamics for U.S. LNG.

Port Arthur LNG Phase II is estimated to export 1.91 billion cubic feet per day (Bcf/d) once finalized. The department’s action is the fifth LNG export authorization issued by the department bringing the total volume of exports related with approvals under Trump’s headship to 11.45 Bcf/d.