The Trump Administration Gives Green Light to Major Oil and Gas Export Projects

The Trump administration has recently granted approvals for two significant oil and gas export projects on the U.S. Gulf Coast after years of waiting under the Biden administration. The approved projects include the Texas GulfLink offshore oil loading terminal and the Commonwealth LNG plant in Louisiana.

Texas GulfLink (TGL)

TGL is a proposed deepwater oil loading terminal on the Gulf Coast designed to transport large quantities of U.S. crude to buyers overseas, primarily in East Asia. The Gulf Coast seaports are unable to accommodate fully laden Very Large Crude Carriers (VLCCs), leading to the need for smaller tankers to transfer oil parcels to VLCCs via reverse lightering. This process adds to the export costs and reduces competitiveness on long-haul trades to Asia. However, TGL aims to comply with all safe maneuvering guidelines for VLCCs, potentially reducing costs and enhancing competitiveness.

The location of TGL would be approximately 30 miles off the coast of Brazos County, Texas. Sentinel Midstream, the sponsor of the project, believes that TGL could support more oil sales to Asian buyers, thereby boosting U.S. jobs in Exploration and Production (E&P) activities.

U.S. Transportation Secretary Sean P. Duffy expressed enthusiasm about the approval, stating, “Today, we are unleashing the full power of American energy and increasing our energy revenue to dominate the global market.”

Despite the approval, the construction of TGL is not guaranteed to start immediately. The commercial landscape for VLCC loading has evolved, potentially impacting the project’s viability in the current market scenario.

Commonwealth LNG Plant

The Department of Energy recently approved a gas export license for the Commonwealth LNG plant in Louisiana, marking the first project licensed under the new administration. The project had been awaiting its export license for an extended period, making it a significant milestone for the company.

Commonwealth CEO Farhad Ahrabi expressed gratitude for the regulatory approvals, highlighting President Trump’s prioritization of the American energy industry. The project aligns with the administration’s focus on supporting energy initiatives.

The approvals for these projects signify a push towards enhancing the U.S. energy sector’s global competitiveness and economic growth. Despite challenges in the market environment, the green light for these ventures signals a positive outlook for the industry.