GlobalData Says North America Leads Long Term LNG Contracts

North America signed the most long-term contracts for the export of liquified natural gas (LNG) in 2023, the region penned 21 deals last year.

A Story By Andreas Exarheas | | North America signed the most long-term contracts for the export of liquified natural gas (LNG) in 2023, GlobalData outlined in a release sent to Rigzone recently.

The region penned 21 deals last year, the company revealed in the release, which highlighted that GlobalData’s latest report showed that 16 of these contracts were signed for exports from the United States, four were signed for exports from Mexico, and one was signed for exports from Canada.

In the U.S., the biggest contract was signed by NextDecade, with a commitment to supply 5.4 million tons per annum (mtpa) of LNG to TotalEnergies from 2026 to 2046, GlobalData noted in the release, adding that NextDecade also signed one more contract for the supply of 1.0 mtpa of LNG to Itochu Corporation for 15 years, from 2027 to 2042.

In Mexico, four contracts were signed by Mexico Pacific Limited LLC to supply LNG from the Sonora liquefaction terminal, GlobalData said in the release, adding that, among these, the most substantial contract was with ConocoPhillips for the supply of 2.2 mtpa of LNG for 20 years from 2027 to 2047. In Canada, the contract was signed by Woodfibre LNG Ltd to supply 0.5 mtpa of LNG from the Woodfibre terminal to BP plc for 15 years from 2027 to 2042, GlobalData pointed out.

“Energy companies in North America continue to bet on strong long-term LNG demand due to the role of natural gas as a bridge fuel for energy transition and decarbonization efforts,” Bhargavi Gandham, an oil and gas analyst at GlobalData, said in the release.

“The Russian-Ukraine war has provided additional opportunity for these companies to sign contracts for LNG exports to Europe,” Gandham added.

North America signed the most long-term contracts for the export of liquified natural gas (LNG) in 2023, the region penned 21 deals last year.

Back in June 2023, NextDecade revealed that TotalEnergies had agreed to purchase 5.4 mtpa of LNG from Phase 1 of the Rio Grande LNG project – which comprises trains 1, 2, and 3 –  for 20 years on a free on board (FOB) basis indexed to Henry Hub, and noted that it had options to purchase LNG from train 4 and train 5.

In January last year, NextDecade announced the execution of a 15-year sale and purchase agreement with Itochu Corporation for the supply of LNG from NextDecade’s Rio Grande LNG export project in Brownsville, Texas.

In August 2023, Mexico Pacific announced that it and ConocoPhillips had signed sales and purchase agreements for the latter to offtake approximately 2.2 mtpa in aggregate of LNG across trains 1, 2, and 3 of Mexico Pacific’s “anchor LNG export facility, Saguaro Energia”.

In September last year, Woodfibre LNG Limited Partnership announced that Woodfibre LNG, which it dubbed the world’s first LNG export facility that is set to achieve net zero carbon emissions, had committed all of its offtake for sale to BP Gas Marketing Limited (BPGM), “with a total firm LNG offtake of 1.95 million tons per annum (MTPA) and the remainder on a flexible basis”.

Woodfibre noted at the time that it had signed a third LNG SPA with BPGM for the delivery of LNG from the Woodfibre LNG export facility near Squamish, British Columbia. Under the terms of this SPA, BPGM will receive an additional 0.45 MTPA of LNG over 15 years on a FOB basis, Woodfibre stated in the announcement.

In a separate release sent to Rigzone in August 2023, GlobalData said the U.S. is set to continue to lead global LNG liquefaction capacity additions, “contributing 46 percent of the total LNG liquefaction capacity additions between 2023 and 2027”.

“GlobalData’s latest report, LNG Liquefaction Terminals Capacity and Capital Expenditure (CapEx) Forecast by Region, Key Countries, Companies and Projects (New Build, Expansion, Planned and Announced), 2023-2027, reveals that the U.S. is expected to add a new build LNG liquefaction capacity of 158.4 mtpa by 2027,” the company stated in that release.

“The country is estimated to add another 58.2 mtpa capacity from expansion projects,” it added.

In that release, GlobalData oil and gas analyst Himani Pant Pandey, said, “abundant shale gas and strong demand for LNG in Asia and Europe have been primarily encouraging investments in the LNG liquefaction projects in the United States”.

“The European plans to stop natural gas imports from Russia due to the Russian-Ukraine war have given further impetus to the U.S. liquefaction projects,” Pandey added at the time.

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