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US gas prices may rise on LNG build-out

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US to be main supplier of new LNG to the world

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Rising LNG construction costs force projects to take early

FID

(Adds details, context, quotes from paragraph 2 onwards)

By Curtis Williams

HOUSTON, Nov 14 (Reuters) - U.S. liquefied natural gas

plants could take on as much as 40 billion cubic feet of natural

gas per day in coming years, Cheniere Energy Chief

Commercial Officer Anatol Feygin said on Friday.

U.S. plants are currently using a record 18 bcfd of natural gas

to produce LNG, according to data from financial firm LSEG.

The increased demand for liquefaction could lead to

natural gas prices, which have risen around 62% over the

past year, becoming even more expensive toward the end of the

decade, Feygin said at a seminar held by the Federal Reserve

Bank of Kansas City.

"You kind of saw that in 22/23 coming out of COVID. LNG went

back up to full utilization and then grew, so Nymex had an

incursion into the high single digits. Very quickly supply

responded," Feygin said, suggesting that natural gas drillers

would be able to increase output to match the increased demand.

While there are fears about an oversupplied market as new LNG

capacity comes online, the executive said that Asian countries

such as Bangladesh and Pakistan could be attracted by lower

prices and end up increasing demand.

The world will need to add 30 million metric tons of LNG

every year to meet global demand growth, with most of the new

capacity coming from the U.S., Feygin said.

Rising construction costs have driven some of the recent final

investment decisions in U.S. LNG, he said.

"Over two-thirds of the FID this year was done because the

fixed-priced EPC contracts were about to expire and there was a

rush to maintain the construction cost of building the LNG

plant," Feygin said.

The U.S. LNG sector could eventually produce as much as 300

mtpa, Feygin said, acknowledging that the sharp growth could

challenge some producers if they're not prepared to weather

periods of lower prices.

Only 17% of the new capacity to come from plants that

reached FID this year has been sold under long-term contracts,

and many portfolio players are unprepared, he warned.

(Reporting by Curtis Williams in Houston; Editing by Leslie

Adler, Nathan Crooks and Edmund Klmaann)