Wood MacKenzie: No US LNG export projects expected in 2021, making it second year in a row facilities don’t get built as sponsors struggle to secure long-term contracts, Some projects may die

No U.S. LNG Export FIDs Predicted in 2021, Says Wood Mackenzie by Caroline Evans, March 31, 2021, Natural Gas Intelligence

No U.S. liquefied natural gas (LNG) projects are expected to be sanctioned this year, marking the second year in a row developers may postpone moving ahead with facilities, according to Wood Mackenzie.

Consultants during a webcast last week said domestic final investment decisions (FID) were unlikely as sponsors struggle to secure long-term contracts

“Generally, we’ve seen a slowdown in the pace of sales contract activity,” said Wood Mackenzie’s Alex Munton, principal analyst for North American LNG. “Pre-FID projects will continue to struggle to secure buyers, given the huge wave of LNG currently under construction globally. For that reason, we see a limited window to project FIDs in the U.S. for the next couple of years.”

Some projects may not survive, he said, noting Annova LNG’s decision to shelve its South Texas development.

… Munton acknowledged there was some risk to projections as the spike in spot prices during January could cause customers to reengage in discussions for long-term offtake contracts. The global appetite for the Henry Hub benchmark could also increase, as it is seen as relatively stable compared to other indices.

Moreover, delays to pre-FID projects outside the United States, including in Mozambique, Papua New Guinea and Australia, could also give domestic projects an edge in negotiations.

The outlook for the years ahead is not clear. Munton said U.S. projects could face more headwinds. He cited the potential for a shorter-than-expected oil recovery, a possible mid-decade supply glut and heightened uncertainty around the energy transition.

“Offtakers are having to decide on signing a 20-year contract which will extend well beyond 2040, when the future of gas and LNG demand could look very different under alternative energy transition scenarios,” he said.

‘Record Highs’

Current LNG demand appears to be strong, as feed gas deliveries to operating export facilities have recently hit record highs. Interstate pipeline feed gas recently reached a new high of 11.2 Bcf/d, about 114% above nameplate capacity, said Wood Mackenzie’s Allison Hurley, team lead for LNG and Proprietary, Natural Gas. The finding is in line with comments by Cheniere CEO Jack Fusco earlier this month that the company had achieved production of 5 million metric tons per year above nameplate capacity — equivalent to an extra train.

The numbers are not unusual, Hurley said, but they indicate greater demand than facilities can supply when running at nameplate capacity, which is used to satisfy contract terms.

“That’s why if demand is higher, we see greater variability in what production looks like at these individual trains,” she said. “And so we can hit peak capacity numbers higher than the stated nameplate capacity.”

Recent feed gas nominations at the five trains in service at Cheniere’s Sabine Pass LNG facility in Louisiana were about 40% higher than the nameplate capacity. Deliveries to the company’s three-train Corpus Christi LNG facility in Texas were also 33% over nameplate, Hurley said.

Elsewhere, feed gas deliveries to the Sempra Energy-operated Cameron LNG facility were roughly 17% above stated nameplate capacity.

Refer also to:

“Bad Corporate Citizen” Pieridae, after demanding nearly $1Billion of public’s money (during a pandemic no less) while promoting dubious Goldboro LNG in Nova Scotia, now threatens legal action to silence concerned citizens. Bradley Toms: “If there’s one way to show you’ve got bad intentions it’s threatening a SLAPP lawsuit against people who are just repeating things that you’ve said.”

Courageous feisty and wise Ireland! “Cork LNG is scrapped!” “Fracking and all of its effects has no place…. Not here, not anywhere.”

“Sheer Delight:” After 13 year legal battle, Irish High Court quashes all Shannon LNG permissions; Opens window for ban on imported frac’d gas

European Court of Justice rules against regulator for approving USA New Fortress Energy’s frac’d gas import terminal in Ireland; All permits and permissions for Shannon LNG to be quashed. Bravo to Friends of Irish Environment and its unstoppable legal team of James Devlin, John Kenny and Fred Logue (unlike Ernst’s quitting lying lawyers, Murray Klippenstein and Cory Wanless, and Canada’s lying top court pissing on the Charter to enable law-violating AER).

Why is LNG being pimped around the world to the tune of $Trillions as more and more investors & communities say no to frac’ing and fossil fuels? Calls into question motivations of gov’ts and companies–do they just want to assert power?

Down down down goes LNG!~ It “looks to be a damp squib.”

Nikiforuk writes his most powerful: Wet’suwet’en Raids: Canada Chooses Colonialism Again, A future of reconciliation is now squandered along with our billions propping up LNG.

This entry was posted in Global Frac News. Bookmark the permalink.