Changing Restrictions on Russian Gas to Europe Would Disproportionately Impact US LNG Exports, New S&P Global Commodity Insights Study Finds

Core Insights - The potential changes in sanctions on Russian gas could significantly impact U.S. LNG investments, with a possible effect on up to $120 billion and 29 MMtpa of future projects [1][4][5] Scenario Analysis - **Current Trend Scenario**: U.S. LNG liquefaction project final investment decisions (FIDs) are projected at 33.7 MMtpa, with a direct expenditure of$138 billion from 2025 to 2040 [7] - Opening the Taps Scenario: If sanctions on Russian gas are lifted, U.S. LNG FIDs would drop to 16.5 MMtpa, leading to a $67 billion investment reduction [8] - **Phasing Down Scenario**: This scenario anticipates U.S. LNG FIDs increasing to 45.5 MMtpa, resulting in a direct expenditure of$186 billion from 2025 to 2040 [9] Investment Implications - The "Opening the Taps" scenario could curtail over 17 MMtpa in new U.S. LNG projects, equating to a $70 billion investment loss compared to the "Current Trend" scenario [2][4] - Conversely, the "Phasing Down" scenario could enable an additional 12 MMtpa in U.S. LNG projects, representing an extra$48 billion in investment [3][4] Market Dynamics - U.S. LNG is positioned as a balancing supply in global markets, making it particularly sensitive to changes in price signals and market share due to shifts in Russian gas flows [5] - The study indicates that new LNG contracts are essential to address the growing European gas supply gap, driven by demand recovery and declining domestic production [7]