Zero US LNG Offtake Deals Signed So Far in 2025

US Pre-FID LNG Contracting Stalls in Q1 2025 Despite Policy Push; Qatar Maintains Momentum

In summary:

• Q1 2025 marked the first quarter since Q1 2021 without a single long-term Sales and Purchase Agreement (SPA) signed by a US pre-Final Investment Decision (pre-FID) LNG project.

• This pause occurred despite supportive political signals, indicating that market fundamentals—specifically project economics and future supply/demand concerns—are currently outweighing policy drivers for buyers considering new US projects.

• Key factors dampening US pre-FID contracting include rising Henry Hub gas price forecasts and escalating liquefaction facility construction costs , leading to higher required liquefaction fees.

• Buyers are increasingly cautious, wary of committing to long-term deals amid projections of significant global LNG oversupply emerging from 2025/2026 onwards.

• Competitors, particularly QatarEnergy, continued to secure substantial long-term contracts, leveraging low production costs and oil-linked pricing structures. Australia also saw contracting activity but faces distinct challenges

  The first quarter of 2025 presented a stark anomaly in the otherwise buoyant narrative of American liquefied natural gas (LNG) expansion. Despite a political climate seemingly aimed at "unleashing American energy," with pronouncements overturning previous pauses and accelerating project approvals, the market delivered a different verdict. For the first time since the first quarter of 2021, not a single long-term Sales and Purchase Agreement (SPA) was signed by a pre-Final Investment Decision (pre-FID) US LNG project. This silence from buyers occurred even amidst reports suggesting renewed enthusiasm for US FIDs and anticipated export growth later in the year.

While project developers continued to announce non-binding Heads of Agreement (HOAs) and achieve milestones like FID readiness targets , these steps, while indicative of progress and useful for press releases, do not secure the substantial financing required for multi-billion dollar liquefaction facilities. It is the firm, bankable SPAs that underpin project finance structures and give lenders the confidence to commit capital. The absence of these binding commitments in early 2025, therefore, represents a significant pause in momentum, contrasting sharply with the preceding years of intense contracting activity.

This halt in US pre-FID SPA signings may signal more than just a temporary lull.