As part of the European Union’s (EU) broader REPowerEU strategy to reduce dependence on Russian energy and under the terms of the recently announced U.S.-EU trade agreement, the EU has committed to purchasing $750 billion worth of U.S. energy over the next three years to meet demand. Abundant low-cost natural gas across the Permian, Eagle Ford, and Haynesville basins—combined with modest liquefaction fees and close proximity to liquefied natural gas (LNG) export facilities on the U.S. Gulf Coast (USGC)—continue to make U.S. LNG incredibly competitive. While there is currently no impact to KBRA’s portfolio of LNG export facilities due to their contracted nature, future projects could be affected if they seek to monetize merchant cash flows.

While the announcement is a positive development for U.S. natural gas producers, meeting export requirements at this scale presents significant challenges. In 2024, U.S. export capacity totaled 11.9 billion cubic feet per day (Bcf/d) across eight facilities, predominantly located along the USGC. The Department of Energy (DOE) has authorized a cumulative 55.3 Bcf/d of LNG exports as of June 30, 2025. Several export facilities currently under construction are expected to reach commercial operations date (COD) this year, with additional projects slated to reach COD later this decade. Further, up to eight U.S. LNG export facilities are anticipated to reach final investment decision (FID) by year-end 2025. While this additional capacity will support broader U.S. export goals, many of these facilities are already committed through letters of intent (LOI) or long-term contracts with international offtakers to secure financing. As a result, they are unlikely to have sufficient uncontracted capacity available to fulfill obligations under the recent trade agreement.

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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