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LNG FIDs to mark record year in 2019 globally

Oil&Gas Materials 7 September 2019 13:06 (UTC +04:00)

Baku, Azerbaijan, Sept.7

By Leman Zeynalova – Trend:

Some 30 mmtpa of US LNG has taken FID in 2019, as part of what will be a record year for LNG FIDs globally, Trend reports citing Wood Mackenzie research and consulting company.

“Developing the second wave will be different from the first. Getting to FID will require a deeper focus on gas sourcing within a transitioning US market, where the opportunity to optimize idle regas facilities and repurpose brownfield pipelines is quickly disappearing,” said the company.

As market participants position themselves to catch the second wave, commercial structures are changing.

The first wave leveraged existing underutilised infrastructure in the US. Project facilities such as tanks, berths and header pipes were already in place to support imports. Pipeline capacity could be repurposed with low cost expansions.

The second wave doesn’t have this ‘first mover advantage’. Sourcing gas in the US is getting more complicated. Grid capacity is largely subscribed by the first wave and accessing more supply requires longer pipelines. Either the project or tollers will have to secure additional capacity to reach the market, likely though new – potentially costly – pipeline projects.

However, US LNG is still attractive. The global fundamentals support pricing spreads between the US, Europe and Asia. Demand for new supply projects is increasing, and we believe the impact of the second wave will see the US become the world’s largest LNG exporter by 2024.

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Follow the author on Twitter: @Lyaman_Zeyn

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