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Released May 25, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--After Australian firm Woodside Petroleum Limited (Perth, Australia) announced last week it would sell its 50% interest in the proposed Kitimat liquefied natural gas (LNG) plant in British Columbia (stranding the project without financial backing), many analysts are taking a hard look at the North American LNG projects that have the strongest chance of reaching construction in the near future.
Other North American LNG projects also haven't fared well this year. Annova LNG LLC (Houston, Texas) cancelled its proposed LNG project in Brownsville, Texas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Database can click here for project reports.
Pembina Pipeline (NYSE:PBA) (Calgary, Alberta) has "paused" the development of its Jordan Cove LNG plant in Oregon. Click here for the project report.
And Sempra Energy (NYSE:SRE) (San Diego, California) announced that it would push back the final investment decision on its Port Arthur, Texas, LNG plant from 2021 to 2022. Click here for project reports.
U.S. exports of LNG continued to grow in 2020, averaging 6.5 billion cubic feet per day (Bcf/d) on an annual basis, according to the U.S. Energy Information Administration (EIA).
However, headwinds to North American project development abound due to mounting competition abroad. In first-quarter 2021, Qatar sanctioned its North Field East expansion, which will provide the country with an additional 32 million tons per year and is the largest-ever sanctioned LNG project. When completed, Qatar's LNG output will be 110 million tons per year. The project includes the construction of four 8 million-ton-per-year production trains and is expected to kick off later this year, with an anticipated completion date in late 2025. For more information, click here to view project report.
The Biden administration recently lifted sanctions on the Nord Stream 2 natural gas pipeline, which will carry up to 55 billion cubic meters of gas per year from Russia to Europe--one of the prime destinations for U.S. LNG. The pipeline is about 95% complete. If you subscribe to Industrial Info's Global Market Intelligence (GMI) Pipeline Database, click here for the project reports.
Shane Mullins, Industrial Info's vice president of Product Development, said, "Both events further erode the speed in which additional LNG supplies will be required to meet projected LNG demand by 2026." However, longer-term demand fundamentals are still in place. Mullins said LNG demand is expected to nearly double from 360 million tons last year to 700 million tons by 2040, thanks to continued solid demand from Asia and a rise in gas use for powering hard-to-electrify sectors.
Mullins said one of the key drivers that could boost North American LNG production capacity is making more the production process more environmentally friendly. "One of the key shifts will be that U.S. developers will have to be able to offer more carbon-neutral LNG cargos to rely on the European market, which accounts for about 50% of U.S. LNG demand," he said. "U.S. developers will be further burdened with the need to develop carbon capture and storage-secure long-term contracts."
Earlier this month, Cheniere Energy Incorporated (NYSE:LNG) (Houston) announced that it had supplied a carbon-neutral LNG cargo to Royal Dutch Shell (NYSE:RDS-A) (The Hague, Netherlands). "I think offering climate solutions to our customers is going to be a bigger and bigger portion of our business," Cheniere Chief Executive Officer Jack Fusco said during the company's first quarter earnings call. The cargo used carbon offsets bought from Shell's portfolio of nature-based projects, according to Reuters.
So what North American projects still remain in the cards? Tellurian Incorporated (NASDAQ:TELL) (Houston) has stated it is nearing completion of the commercialization phase for the first phase of its proposed Driftwood project in Louisiana. Tellurian expects to begin some early-phase construction activities this summer, including building roads and preparing the site for full construction. The company expects to give a notice to proceed to contractor Bechtel Corporation (Reston, Virginia) in the first quarter of next year. Click here for project report.
Jesus Davis, Industrial Info's research specialist for North American Oil & Gas Production, Pipelines and Terminals, said Venture Global LNG LLC's Plaquemine LNG in Louisiana could see a final investment decision next year, especially given that all of the plant's initial capacity will be fully contracted by the end of June. Click here for the project report.
Davis also pointed to Pieridae Energy Limited's Goldboro project in Nova Scotia, for which a final investment decision is expected by the end of June. Phase I of the project includes a 5 million-ton-per-year train. Click here for the project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Other North American LNG projects also haven't fared well this year. Annova LNG LLC (Houston, Texas) cancelled its proposed LNG project in Brownsville, Texas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Database can click here for project reports.
Pembina Pipeline (NYSE:PBA) (Calgary, Alberta) has "paused" the development of its Jordan Cove LNG plant in Oregon. Click here for the project report.
And Sempra Energy (NYSE:SRE) (San Diego, California) announced that it would push back the final investment decision on its Port Arthur, Texas, LNG plant from 2021 to 2022. Click here for project reports.
U.S. exports of LNG continued to grow in 2020, averaging 6.5 billion cubic feet per day (Bcf/d) on an annual basis, according to the U.S. Energy Information Administration (EIA).
However, headwinds to North American project development abound due to mounting competition abroad. In first-quarter 2021, Qatar sanctioned its North Field East expansion, which will provide the country with an additional 32 million tons per year and is the largest-ever sanctioned LNG project. When completed, Qatar's LNG output will be 110 million tons per year. The project includes the construction of four 8 million-ton-per-year production trains and is expected to kick off later this year, with an anticipated completion date in late 2025. For more information, click here to view project report.
The Biden administration recently lifted sanctions on the Nord Stream 2 natural gas pipeline, which will carry up to 55 billion cubic meters of gas per year from Russia to Europe--one of the prime destinations for U.S. LNG. The pipeline is about 95% complete. If you subscribe to Industrial Info's Global Market Intelligence (GMI) Pipeline Database, click here for the project reports.
Shane Mullins, Industrial Info's vice president of Product Development, said, "Both events further erode the speed in which additional LNG supplies will be required to meet projected LNG demand by 2026." However, longer-term demand fundamentals are still in place. Mullins said LNG demand is expected to nearly double from 360 million tons last year to 700 million tons by 2040, thanks to continued solid demand from Asia and a rise in gas use for powering hard-to-electrify sectors.
Mullins said one of the key drivers that could boost North American LNG production capacity is making more the production process more environmentally friendly. "One of the key shifts will be that U.S. developers will have to be able to offer more carbon-neutral LNG cargos to rely on the European market, which accounts for about 50% of U.S. LNG demand," he said. "U.S. developers will be further burdened with the need to develop carbon capture and storage-secure long-term contracts."
Earlier this month, Cheniere Energy Incorporated (NYSE:LNG) (Houston) announced that it had supplied a carbon-neutral LNG cargo to Royal Dutch Shell (NYSE:RDS-A) (The Hague, Netherlands). "I think offering climate solutions to our customers is going to be a bigger and bigger portion of our business," Cheniere Chief Executive Officer Jack Fusco said during the company's first quarter earnings call. The cargo used carbon offsets bought from Shell's portfolio of nature-based projects, according to Reuters.
So what North American projects still remain in the cards? Tellurian Incorporated (NASDAQ:TELL) (Houston) has stated it is nearing completion of the commercialization phase for the first phase of its proposed Driftwood project in Louisiana. Tellurian expects to begin some early-phase construction activities this summer, including building roads and preparing the site for full construction. The company expects to give a notice to proceed to contractor Bechtel Corporation (Reston, Virginia) in the first quarter of next year. Click here for project report.
Jesus Davis, Industrial Info's research specialist for North American Oil & Gas Production, Pipelines and Terminals, said Venture Global LNG LLC's Plaquemine LNG in Louisiana could see a final investment decision next year, especially given that all of the plant's initial capacity will be fully contracted by the end of June. Click here for the project report.
Davis also pointed to Pieridae Energy Limited's Goldboro project in Nova Scotia, for which a final investment decision is expected by the end of June. Phase I of the project includes a 5 million-ton-per-year train. Click here for the project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
