Colin Grabow
For years, Puerto Rico has been unable to import natural gas from the US mainland. Thankfully, that has now changed. According to the International Gas Union’s recently-released 2026 World LNG Report, the United States last year became Puerto Rico’s largest liquified natural gas (LNG) supplier, accounting for roughly 35 percent of the island’s imports. And that actually understates matters, as the LNG Puerto Rico imports from Mexico — Puerto Rico’s third-largest supplier — is produced from US natural gas. Counting LNG shipped from Mexico but produced from American natural gas, 59 percent of Puerto Rico’s LNG ultimately originated in the United States.
That remarkable turnaround became possible only because market participants found two ways around the Jones Act, the 1920 law restricting shipments between US points to vessels that are built, flagged, owned, and crewed by Americans. For years, the complete absence of Jones Act-compliant LNG tankers effectively placed abundant American natural gas off-limits to Puerto Rico, forcing the island to import LNG from other countries, including Russia, Nigeria, Norway, Oman, and Egypt.
Both workarounds are imperfect solutions. One requires an unnecessary international detour while the other relies on a single aging vessel that cannot be replaced. Both reflect buyers and sellers adapting to a law that makes direct trade unnecessarily difficult.
The Mexico Workaround: American Gas, Foreign Detour
Perhaps the stranger of the two workarounds runs through Mexico. In a pair of 2023 rulings, Customs and Border Protection concluded that liquefying US pipeline gas on foreign soil transforms it into a “new and different product,” legally distinct from the gas that entered the pipeline. That reclassification has enormous consequences.
Normally, routing goods through a foreign country doesn’t exempt them from the Jones Act. But if deemed transformed into a new product once abroad, goods can be exported back to the US on less costly internationally flagged ships.
That’s exactly how natural gas gets from Texas to Puerto Rico. In July 2024, New Fortress Energy began producing LNG off the coast of Altamira, Mexico, with feedgas from the Sur de Texas-Tuxpan Pipeline. By turning the Texas gas into Mexican LNG — at least in the eyes of the law — the energy can be transported to Puerto Rico aboard one of the hundreds of modern LNG carriers operating worldwide.
In contrast, shipping that same gas directly from a Gulf Coast LNG terminal to Puerto Rico would require a Jones Act-compliant LNG tanker.
And there is only one.
The Other Fix: One of the World’s Oldest LNG Tankers
The second export pathway to Puerto Rico is more straightforward but comes with some notable limitations. In 1996, Congress carved out a narrow exception to the Jones Act that allows foreign-built LNG tankers to serve Puerto Rico, provided they meet the Jones Act’s other key requirements (US-flagged, US-crewed, US-owned) and were built before the legislation’s passage (October of that year).
In late 2024, US shipping company Crowley purchased a qualifying ship, a steam-turbine LNG carrier delivered by a French shipyard in 1994. Renamed American Energy, the ship entered service in March 2025 and now regularly shuttles between the Gulf Coast and Peñuelas, Puerto Rico.
Although the vessel has unquestionably expanded Puerto Rico’s access to American LNG, it is far from an ideal solution.
First, it’s just one ship and cannot meet Puerto Rico’s LNG needs on its own. Second, at nearly 32 years old (its birthday is August 24), American Energy is one of the world’s oldest actively trading LNG carriers. According to the 2026 World LNG Report, only two such vessels worldwide are older out of a global fleet of over 700. Meanwhile, LNG carriers built in 1994, and even some built later, are already considered elderly by industry standards and are being scrapped. Aging vessels require more maintenance, and steam-powered ships such as American Energy are markedly less fuel-efficient than the engines on modern tankers, making for costlier voyages.
Most importantly, the ship comes with an expiration date. American Energy will eventually be retired — as virtually every LNG carrier of its generation already has been — and nothing being built today can replace it under current law. Puerto Rico’s ability to receive LNG directly from the mainland is unquestionably an improvement, but Americans shouldn’t have to rely on one of the world’s oldest LNG carriers to make domestic trade possible.
Progress, Not a Solution
This is not to understate what’s changed. As recently as 2024, Puerto Rico had no legal way to receive American LNG, while today nearly 60 percent of its LNG ultimately originates in the United States. That’s real progress, and it shows the economic value that can be unlocked when the Jones Act’s grip loosens even slightly.
But consider what it took to make that happen. One pathway depends on a Jones Act-induced foreign detour (hardly the first such detour) and the other on a nearly 32-year-old steam-powered tanker that is one of only three such vessels its age or older still trading worldwide.
This is not how domestic commerce should work.
Furthermore, the Jones Act’s application to bulk LNG transport produces no benefit to the US maritime industry. No LNG tanker has been constructed in the United States since 1980, and today’s lone Jones Act-compliant LNG carrier is itself only possible because Congress relaxed the law’s US-build requirement.
Puerto Rico deserves better than a legal workaround and an aging tanker to engage in trade with the rest of its own country. Congress could address that in numerous ways, ranging from removing the outdated October 1996 construction cutoff for LNG tankers serving Puerto Rico to broader Jones Act reform to outright repeal.
Until Congress changes the law, buying American energy will remain unnecessarily complicated for both Puerto Rico and the rest of the United States.
