U.S. LNG supply will not increase overnight, cautions Exxon

(Bloomberg) – New supplies of liquefied natural gas take time to develop, and significant new capacity will only start kicking in over the coming years, a senior Exxon Mobil Corp. executive said.

Demand for LNG is rising as Europe turns to the fuel to help plug gaps after losing the supply of Russian gas piped through Ukraine. Exxon has four LNG projects under development and expects to start commissioning the production units in the U.S. and Qatar first, by the end of this year. Other U.S. export projects will also start ramping up production, but the bulk of new supply won’t arrive until 2027.

“The problem is you don’t find gas from one day to the next,” ExxonMobil Europe president Philippe Ducom, told Bloomberg at the site of the Handelsblatt energy conference in Berlin, “Significant new LNG capacity is only coming on stream in 2026-2027.”

U.S. President Donald Trump, whose country is the world’s biggest LNG exporter, has threatened Europeans with tariffs if they don’t buy more oil and gas. As soon as he took office this month, Trump also lifted a freeze on new LNG export permits that his predecessor Joe Biden had introduced, but these projects are not expected to go online before 2031.

Ducom said that Europe had been reluctant to commit to long-term contracts and bring supply security in the equation, which investors need to take the huge financial decisions to start new LNG projects.

“That’s clearly having an impact on the cost of energy for Europe because gas impacts power,” he said. “We will need gas for decades to come and in 2050, we will still need gas. But there has been this reluctance to commit and to try to bring supply security in the equation.”