New LNG projects threatened by rising labor costs


    A shortage of skilled labor coupled with high inflation along the Gulf Coast is pressuring liquefied natural gas developers and delaying some projects from reaching a financial go-ahead, Reuters reports

    There are five LNG plants under development in Texas and Louisiana and 16 others on the drawing board in the U.S. looking to secure investment and customers. The five under construction would add a combined 86.6 million metric tons per annum of the superchilled gas, enough to keep the U.S. as the world’s largest exporter for years to come.

    But the fate of some of the early projects has become less certain however as labor costs have jumped as much as 20% since 2021, busting construction budgets and squeezing projected returns for those firms still trying to attract new investors. 

    A spokesman with Venture Global LNG, with its planned $10 billion Plaquemines plant in Louisiana, says the modular nature of the projects has “insulated us from the significant labor and inflationary challenges that have impacted other projects.”

    Data from the U.S. Bureau of Labor and Statistics show wages for construction workers in the oil and gas pipeline sectors increasing in Louisiana, where many of the new U.S. plants are being built, by 19% in 2023 compared to 2022.

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