Williams: Pipelines, Not Supply, Could Limit U.S. LNG Growth

Growing LNG demand is shifting attention toward pipeline capacity and permitting delays as U.S. energy companies warn infrastructure constraints could challenge the next phase of export growth.

(P&GJ) — Pipeline infrastructure and permitting delays could become the biggest obstacles to the next phase of U.S. LNG expansion, even as domestic natural gas supply remains abundant, according to comments from Williams executives at the Offshore Technology Conference.

Williams executives said the U.S. continues to hold a competitive advantage in global energy markets because of its large, low-cost natural gas supply base. However, the company argued that expanding pipeline and storage capacity will be critical to delivering reliable feedgas supplies to Gulf Coast LNG export terminals as demand grows through the decade.

David McKellips, Williams vice president of commodity marketing, said pipeline and storage infrastructure remain essential to maintaining reliable and affordable gas supplies for domestic consumers and LNG export markets. He noted that permitting timelines have increasingly become a major challenge for new infrastructure projects.

Williams President and CEO Chad Zamarin said LNG demand is expected to continue increasing through the end of the decade, with export demand potentially rising from roughly 20 billion cubic feet per day to more than 30 billion cubic feet per day. The company is positioning for that growth through expansions tied to LNG facilities, industrial demand and power generation markets.

The U.S. remains the world’s largest natural gas producer, and growing LNG demand is expected to coincide with rising competition from export projects in Canada and Qatar. Williams said maintaining the country’s cost advantage will depend on whether pipeline infrastructure and permitting processes can keep pace with demand growth.