Higher prices will be needed to support a large "second wave" of US liquefied natural gas export projects in the coming years, according to at least one expert, writes Caroline Evans.

While abundant associated gas from the oily Permian basin will likely be able to supply a small number of new facilities on the US Gulf Coast, it will not be enough to support a large number of new facilities coming on line in the next few years, East Daley Capital senior research director Matthew Lewis said last week.

"If it's 18 billion cubic feet per day, you're going to need higher gas prices because you're going to need guys in the Marcellus and the Haynesville and the Utica to drill those wells and get that gas to market," Lewis said during a panel discussion at the Enercom conference in Denver.

"So this is very important to the future of E&Ps that are natural gas drillers," he added.

The US Energy Information Administration recently lowered its US Henry Hub benchmark spot price forecast for the second half of 2019 to an average of $2.36 per million British thermal units from $2.50 in a July projection.

Lewis said new US projects with total capacity of 37 billion cubic feet per day of gas have currently been proposed, with final investment decisions still pending.

Among them are Tellurian's Driftwood LNG project in Louisiana and NextDecade's Rio Grande facility in Texas, which are expected to be sanctioned later this year.

However, Lewis does not see enough near-term demand that would allow all of those projects to move forward.

One of the proposed projects, LNG Ltd's Magnolia, has had to push back several times the intended date of its final investment decision because it has yet to secure sufficient offtake to move forward.

LNG Ltd chief executive Greg Vesey said discussions with potential customers have stalled amid the US-China trade war as well as the soft global spot market for LNG.

Vesey said the trade tensions with China had put a damper on its strategy to "go hard" into China looking for customers.

Last year, Hong Kong-listed IDG Energy invested about $19 million into the proposed 8.8 million tonnes per annum facility.

"They are very connected in the industry and everything was going swimmingly until the trade wars came up," he said.

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US LNG set for 'second wave' of projects