High global natural gas prices are breaking a two-year logjam of new U.S. liquefied natural gas (LNG) projects with at least three of the multibillion-dollar proposals likely achieving enough supply contracts to start construction this year, said developers and industry experts.

A Louisiana project that received a green light in 2019 was the last wholly new U.S. plant to receive a go-ahead, benefiting from then-strong demand from China and utilities swapping to LNG from coal. A dozen others were stalled, first by the China-U.S. trade war and then by the COVID-19 pandemic and environmental concerns.

But super-hot demand for the fuel in northern Europe and China have pushed global gas prices to near record highs, reviving financing prospects for plants that chill natural gas into liquid for transport by seaborne tankers.

A key benchmark price for natural gas deliveries in northern Europe has more than quadrupled from a year ago, to about $30 per million British thermal units per day (mmBtu).

Europe’s declining gas production and increased dependency on Russia for its supplies also has driven worldwide LNG prices higher and focused attention on the need for new LNG plants in the United States and Asia.

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Source: Sweetcrudereports