U.S. liquefied natural gas (LNG) exports continued to rise in 2025, and a slew of new projects were sanctioned. However, tightening spreads between global LNG markers and the U.S. natural gas benchmark put a damper on 4Q25. Learn more below about the robust project announcements seen in 2025, how margin compression impacted the liquefaction subsector in 4Q, and which projects are targeting Final Investment Decision (FID) in early 2026.
LNG exports are expected to be the largest driver of incremental U.S. natural gas demand over the next few years. 2025 marked a historic year for U.S. LNG, as exports reached new highs and several projects started construction. Roughly 9 billion cubic feet per day (Bcf/d) of new U.S. LNG export capacity reached Final Investment Decision (FID), including major projects from Venture Global, Woodside Energy (WDS), and Sempra Infrastructure.
LNG exports surged in 2025 as new infrastructure came online, jumping 26% year-over-year to a record 14.6 Bcf/d. This growth was driven by the rapid ramp-up of Venture Global’s Plaquemines facility and the completion of Cheniere Energy’s (LNG) Corpus Christi Stage 3. Both projects began production at the end of 2024. Another ~2.4 Bcf/d of capacity is expected to come online in 2026, driven by VG’s Plaquemines LNG Phase 2 expansion and Exxon’s (XOM) Golden Pass Train 1. Through 2031, U.S. LNG export capacity is set to double based on projects under construction, as shown below.
Most of the capacity additions greenlit in 2025 happened in the first part of the year. The sole FID in the fourth quarter was NextDecade’s (NEXT) Rio Grande Train 5, a 0.7 Bcf/d expansion announced in mid-October. In December, Energy Transfer (ET) decided to suspend its 2.2 Bcf/d Lake Charles LNG project in favor of focusing on natural gas pipeline projects with better risk/return profiles.
During the fourth quarter, LNG-related stocks came under pressure. Liquefaction was the worst-performing subsector in the Alerian Midstream Energy Select Index (AMEI) in the fourth quarter and the only subsector with a negative total return for the year. While company-specific news related to arbitration proceedings weighed on Venture Global, Cheniere and NextDecade were each down 17.1% and 22.4%, respectively, during 4Q25.
As shown in the chart below, the spread between key European (TTF) and Asian (JKM) LNG markers and the U.S. Henry Hub benchmark compressed during the fourth quarter. Spreads fell to multi-year lows in the $4-$6 per million British thermal unit (MMBtu) range by December, after holding steady between $8-$12/MMBtu during the first half of 2025.
Though weather primarily drives the short-term moves in global natural gas prices, ample LNG supply from the U.S. contributed to a months-long decline in European (TTF) and Asian (JKM) natural gas prices. Compounding this, Henry Hub prices were particularly strong in early December on cold weather, closing above $5/MMBtu on December 5 before retreating back to a $3-handle by year end.
Squeezed on both sides and facing oversupply concerns, liquefaction names saw broad weakness towards the end of 2025. With freight and regasification costs consuming ~$1-$2/MMBtu, spot margins briefly fell below the standard fixed liquefaction fee of $2-$3/MMBtu in December.
Cheniere Energy, the largest producer of LNG in the U.S., benefits from a portfolio that is over 90% long-term contracted, keeping it largely insulated from spot price volatility. Cheniere relies on consistent cash flows from long-term contracts that lock in fixed liquefaction fees for specified volumes. These agreements cover roughly 90% of anticipated production through the mid-2030s with a weighted average remaining life of approximately 15 years. As a result, spread compression has a limited impacted on current earnings, only affecting the 5%–10% of capacity retained by its marketing segment.
On the other hand, Venture Global faces a steeper challenge. The company’s strategy of delaying commercial operations to sell commissioning cargoes into the spot market (read more) left it disproportionately exposed when global spreads compressed. This was compounded by a company-specific litigation overhang, highlighted by an arbitration loss to BP in October. Similarly exposed are pre-operational developers like NextDecade, which aims to expand beyond its currently sanctioned 5-train footprint. Although ~85% of Trains 1–5 are already contracted to creditworthy counterparties, the company’s future-weighted valuation leaves it sensitive to cautious market sentiment in a low-spread environment that could delay FIDs.
Cold global weather forecasts and plummeting gas inventories in Europe and Northeast Asia since the start of 2026 have sent global benchmarks soaring again, offering relief to LNG exporter margins and boosting equities. Liquefaction is by far the best-performing subsector in AMEI year-to-date through January 23, with a positive arbitration outcome boosting VG. Still, oversupply concerns could weigh on the liquefaction space in the near term.
Three LNG projects that previously expected to reach Final Investment Decision (FID) by the end of 2025 have pushed those targets into the first half of 2026 as shown in the table below. Delfin FLNG will likely reach FID first, announcing in mid-January that it expects to FID “in the next month.” Caturus Energy, the parent company of Commonwealth LNG, expects to achieve FID in the first quarter of 2026. Finally, Glenfarne recently signed a definitive sales and purchase agreement (SPA) for its Texas LNG project with a European energy company for 0.1 Bcf/d. The offtake agreement fully subscribes Texas LNG, and Glenfarne now targets completion of the financing process and FID for Texas LNG in “early 2026.”
The LNG export projects under construction are set to double U.S. export capacity by 2031, and more projects may start construction in the coming months. Oversupply concerns were a factor in 4Q and could weigh on the space again, though fundamentals have improved into 2026.
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AMEI is the underlying index for the Alerian Energy Infrastructure ETF (ENFR) and the ALPS Alerian Energy Infrastructure Portfolio (ALEFX).
Inside Venture Global’s LNG Strategy
Sizing Up the Next Wave of U.S. LNG Export Projects
Cheniere Grows LNG Capacity, Updates Dividend Outlook
Canada Enters LNG Export Market as First Facility Prepares for Shipment
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