By Marcy de Luna

HOUSTON (Reuters] – This week, two U.S. liquefied LNG (LNG), projects were launched. The rise in demand and high prices of the super-chilled fuel is due to Russia’s threats.

Developers Sempra Energy (NYSE:) and New Fortress Energy(NASDAQ:) Inc have reached agreements for separate projects. One of these could include the production of LNG in 12 months. This plant typically needs long-term contracts to start, which can take many years.

New Fortress Energy chose to make its own investment to create a 2.8 million tonne annum (MTPA), facility off the Louisiana coast due to increasing demand from customers in Europe.

“There was already a significant supply demand imbalance for natural gas in the world,” said Wes Edens, chief executive of New Fortress Energy. “With the urgency for Europe to reduce its dependence on Russian gas, it is vitally important to fast track LNG production in the United States.”

Russian President Vladimir Putin demands foreign buyers pay Russian gas in Russian rubles starting Friday, or have their supplies reduced. A move European capitals rejected while Germany claimed it was “blackmail”.

According to the Biden administration, last week the U.S. promised to provide European customers with additional LNG supplies this year, at a total of 15 billion cubic metres (bcm), and another 50 bcm in 2030. These will replace Russian gas imports, as Russia is being punished for their invasion of Ukraine.

DIMENSION OF RISKS

A dozen LNG developers stated last year that they were aiming to make final investments in their projects. Only Sempra’s Energia Costa Azul LNG Terminal in Baja California (Mexico) has been constructed in the past two years.

On Thursday, Sempra reached an agreement with TotalEnergies to provide gas from the second Mexican project Vista Pacifico LNG. TotalEnergies would be able to acquire a 16.6% interest and take around one third of the plant’s 4 MTPA export production under the terms.

The LNG price predictions are so strong that they are worth taking, according to Alex Munton, an LNG analyst from consultancy Wood Mackenzie.

Sempra spokesperson Paty Ortega Mitchell stated that there is still a lot of interest in the LNG projects.