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Released April 07, 2022 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--As Washington presses U.S. oil producers to pick up the pace, exporters of U.S.-sourced liquefied natural gas (LNG) are moving even more quickly to shore up new deals.
Washington is growing increasingly concerned about the looming shortage of Russian fuels that would result from sweeping sanctions imposed in response to the February invasion of Ukraine. Russia is a global leader in both crude oil and natural gas production and efforts to find alternative resources to tacitly cut off the resultant war funding for the Kremlin are accelerating.
North America gets very little from Russia, though that's not the case for the European economy. European economies said they'd stop sourcing Russian coal, though other fossil fuels will be far more difficult to replace.
During a trip to Europe last month, President Joe Biden pledged to deliver an extra 1.5 billion cubic feet of LNG per day in an effort to wean the economy off Russia. The United States is a global leader in natural gas production and already leapfrogged Australia and Qatar to become the world leader in LNG exports.
The U.S. market, however, is not controlled by the government. Nevertheless, a handful of announcements from U.S. LNG companies show the sector is developing quickly to meet the trajectory of global dominance.
Last week, New Fortress Energy (NASDAQ:NFE) (New York, New York) said it filed the necessary applications to site, build and operate an LNG terminal off the coast of Louisiana. The company added that its fast deployment concept means the facility could be up and running by the first quarter of 2023.
"With rapid deployment, this project can play a significant role in supporting our nation's commitment to our European allies and their energy security as well as support our efforts to reduce emissions and energy poverty around the world," Chief Executive Officer Wes Edens said in a statement.
Elsewhere, Flex LNG (NYSE:FLNG) (Hamilton, Bermuda) said that U.S.-based LNG exporter Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas) secured a fifth carrier from its fleet. Cheniere operates the Sabine Pass terminal in Texas. Of the 25 vessels laden with LNG that left U.S. export terminals during the week ending March 30, eight of them left from there.
Cheniere takes on the LNG carrier Flex Aurora at some point during the third quarter. All of the Flex LNG carriers have a load capacity of around 6.1 million cubic feet.
But there's only so much U.S. LNG companies can do for Europe. Norwegian consultant Rystad Energy estimated that about a quarter, or around 2.4 billion cubic feet per day, of the LNG exported from the United States last year went to Europe. Despite Biden's pledge, however, Rystad said that all seven U.S. LNG export facilities currently in service are operating at full capacity.
Click on the image at right for charts showing U.S. LNG exports to Europe for 2019, 2020 and 2021.
And Europe is not the only game in town. Many of the economies in Asia face similar dilemmas in getting secure sources of energy and there too the United States has a role. On Wednesday, NextDecade Corporation (NASDAQ:NEXT) (Houston) announced it signed a 20-year sales and purchase agreement with China's ENN LNG, a wholly-owned subsidiary of ENN Natural Gas Company, Limited (China) to take on the super-cooled gas from NextEnergy's Rio Grande export facility, a project slated for Brownsville, Texas.
Click on the image at right for charts showing U.S. LNG exports to Asia for 2019, 2020 and 2021.
Once that facility is up and running by 2026, two trains will churn out about 5.3 billion cubic feet of LNG per year for the foreign market. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for the project reports for the Rio Grande facility.
At issue there, however, is shipping. The Panama Canal Authority is proposing an increase on the toll it charges for vessels to pass through.
The canal is the shortest route to Asia from U.S. LNG terminals on the Gulf coast, but the new fee structure -- which the canal authority said was based on market conditions -- could tack on an additional 0.7% to market prices by 2025.
Energy security is not easy. It takes a long series of processes, from federal approvals to new shale natural gas wells, before LNG can show up on the market. And in many aspects, the global market is a non-zero-sum game -- addressing European energy concerns means other producers, including Russia, can build their market share in other economies.
Despite the U.S. position as a world leader in oil and natural gas, then, it will be difficult to do more to address energy security concerns in a comprehensive, global fashion. As in geopolitics, bids for hegemony rarely end in hegemony.
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.
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Washington is growing increasingly concerned about the looming shortage of Russian fuels that would result from sweeping sanctions imposed in response to the February invasion of Ukraine. Russia is a global leader in both crude oil and natural gas production and efforts to find alternative resources to tacitly cut off the resultant war funding for the Kremlin are accelerating.
North America gets very little from Russia, though that's not the case for the European economy. European economies said they'd stop sourcing Russian coal, though other fossil fuels will be far more difficult to replace.
During a trip to Europe last month, President Joe Biden pledged to deliver an extra 1.5 billion cubic feet of LNG per day in an effort to wean the economy off Russia. The United States is a global leader in natural gas production and already leapfrogged Australia and Qatar to become the world leader in LNG exports.
The U.S. market, however, is not controlled by the government. Nevertheless, a handful of announcements from U.S. LNG companies show the sector is developing quickly to meet the trajectory of global dominance.
Last week, New Fortress Energy (NASDAQ:NFE) (New York, New York) said it filed the necessary applications to site, build and operate an LNG terminal off the coast of Louisiana. The company added that its fast deployment concept means the facility could be up and running by the first quarter of 2023.
"With rapid deployment, this project can play a significant role in supporting our nation's commitment to our European allies and their energy security as well as support our efforts to reduce emissions and energy poverty around the world," Chief Executive Officer Wes Edens said in a statement.
Elsewhere, Flex LNG (NYSE:FLNG) (Hamilton, Bermuda) said that U.S.-based LNG exporter Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas) secured a fifth carrier from its fleet. Cheniere operates the Sabine Pass terminal in Texas. Of the 25 vessels laden with LNG that left U.S. export terminals during the week ending March 30, eight of them left from there.
Cheniere takes on the LNG carrier Flex Aurora at some point during the third quarter. All of the Flex LNG carriers have a load capacity of around 6.1 million cubic feet.
But there's only so much U.S. LNG companies can do for Europe. Norwegian consultant Rystad Energy estimated that about a quarter, or around 2.4 billion cubic feet per day, of the LNG exported from the United States last year went to Europe. Despite Biden's pledge, however, Rystad said that all seven U.S. LNG export facilities currently in service are operating at full capacity.
And Europe is not the only game in town. Many of the economies in Asia face similar dilemmas in getting secure sources of energy and there too the United States has a role. On Wednesday, NextDecade Corporation (NASDAQ:NEXT) (Houston) announced it signed a 20-year sales and purchase agreement with China's ENN LNG, a wholly-owned subsidiary of ENN Natural Gas Company, Limited (China) to take on the super-cooled gas from NextEnergy's Rio Grande export facility, a project slated for Brownsville, Texas.
Once that facility is up and running by 2026, two trains will churn out about 5.3 billion cubic feet of LNG per year for the foreign market. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for the project reports for the Rio Grande facility.
At issue there, however, is shipping. The Panama Canal Authority is proposing an increase on the toll it charges for vessels to pass through.
The canal is the shortest route to Asia from U.S. LNG terminals on the Gulf coast, but the new fee structure -- which the canal authority said was based on market conditions -- could tack on an additional 0.7% to market prices by 2025.
Energy security is not easy. It takes a long series of processes, from federal approvals to new shale natural gas wells, before LNG can show up on the market. And in many aspects, the global market is a non-zero-sum game -- addressing European energy concerns means other producers, including Russia, can build their market share in other economies.
Despite the U.S. position as a world leader in oil and natural gas, then, it will be difficult to do more to address energy security concerns in a comprehensive, global fashion. As in geopolitics, bids for hegemony rarely end in hegemony.
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.
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