IIR Webinar: Global LNG Developments Gain Traction

Researched by Industrial Info Resources (Sugar Land, Texas)--The global oil and gas industry experienced a shake-up in 2020, when the COVID-19 pandemic slashed demand, and project developers deferred several projects that were on the drawing board. Industrial Info tracked more than $200 billion in oil and gas projects deferred at this time.

However, a couple of years later, things are heating up again, especially in the natural gas sector. Demand is back, and projects are once again moving along. Russia's invasion of Ukraine has shaken up the European gas sector as countries there learn to wean themselves from Russian gas, whether voluntary or involuntarily. In a recent Industrial Info webinar, Shane Mullins, Industrial Info's vice president of product development, and Jesus Davis, research specialist for the oil and gas production, pipelines and terminals industries, discussed how these trends are shaking out in both North America and on a global stage.

Industrial Info is tracking more than $117 billion in liquefied natural gas (LNG) projects, both production and regasification, that are under construction. On the production side, the U.S. led the world in LNG exports for the first half of 2022, although this will change with the unplanned outage at Freeport LNG's (Houston, Texas) production and export facility in Texas, caused by a fire in June. Qatar, which is constructing four trains with a production capacity of 33 million tonnes per annum (MTPA), will retake the world's top export position in 2025. Subscribers to Industrial Info's Production Project Database can click here for the detailed report on the Qatar project.

Much of the world's LNG demand will be constrained by a lack of supply growth until that time. And it's not only Qatar that is building out its production infrastructure. Recent positive final investment decisions (FIDs) have been made for U.S. plants such as Cheniere Energy Incorporated's (Houston) Stage 3 project in Corpus Christi, Texas, which will add 10.5 MTPA of capacity by 2025, and Venture Global LNG's (Arlington, Virginia) Plaquemine facility in Louisiana, which will add 13 MTPA.

Subscribers can click here for the detailed report on the Cheniere project and here for the Venture Global project.

Other facilities, including one in Nigeria, also should be online by 2025, and Mullins expects another couple of LNG projects to be approved in North America in the coming year. Such projects are being made more feasible with the signing of several long-term sales and purchase agreements between potential North American producers and global consumers, particularly those in Europe and Asia.

While Industrial Info is tracking more than 620 MTPA of new LNG production capacity being developed, not all of this will move forward. One of the potential hang-ups to development is financing. Financial institutions are becoming more wary of funding projects involving fossil fuels, leading developers to incorporate lower-carbon operating methods and other environmental, social and governance (ESG) initiatives into their projects.

Several U.S. projects have received approval from the U.S. Federal Energy Regulatory Commission (FERC) and are awaiting FIDs. Such projects include Tellurian Incorporated's Driftwood project in Louisiana, which has begun some pre-FID construction, Train 4 at Sempra Energy's (NYSE:SRE) (San Diego, California) Cameron facility in Louisiana, Energy Transfer's (NYSE:ET) (Dallas, Texas) Louisiana facility and others. Subscribers can click here for details of the Driftwood project, here for the Sempra project and here for the Energy Transfer projects.

As LNG production projects start moving again, so is the consumption side. Europe's buildout of gas infrastructure, both pipelines and LNG regasification terminals, has had a fire lit under it since the Ukraine War erupted. While lots of renewable energy projects are happening in Europe's power sector, European countries are realizing that this power needs to be shored up with a strong source of baseline power, which includes natural gas-fired generation, which is preferred to coal in Europe. As the continent weans itself from Russian gas, imported LNG is expected to play a key role in helping meet these needs. Europe recently began importing more LNG than pipeline gas.

In total, Industrial Info is tracking more than 380 LNG regasification projects worth $134 billion, with Europe and Asia being hotspots for this development. China leads the pack in regard to regasification development. IIR expects 105 MTPA of regasification capacity to be added throughout the world this year.

For those who missed the presentation or for those who would like to hear it again, it will soon be available in Industrial Info's on-demand webinar library.

Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.