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Released July 28, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--While last year represented a period of unprecedented ups and downs for U.S. liquefied natural gas (LNG) producers and exporters, the first half of 2021 set record highs for U.S. LNG exports, according to the U.S. Energy Information Administration (EIA), perhaps paving the way for a new round of capacity buildout.
While U.S. LNG exports started off fairly strong in the first quarter of last year, exports in the second quarter of 2020 plunged as COVID-19 gripped global commerce and lowered energy demand. Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas), the U.S.' largest LNG exporter, recognized $708 million in revenues that were associated with second-quarter 2020 LNG cargos for which customers did not take delivery. The first quarter of 2020 had brought about $51 million of these displaced revenues.
However, as the year progressed, things grew better for U.S. exporters, and consecutive export records were set in November and December. According to the EIA, colder-than-normal winter temperatures in Asia led to an increase in demand for spot LNG cargos, and stronger natural gas demand in the spring of 2021 continued amid low post-winter inventories. Europe also faced a cold winter and lower natural gas inventories, followed by high demand in May and June 2021 as high temperatures prompted increased power usage and lowered inventories.
According to the EIA, U.S. exports of LNG averaged 9.6 billion cubic feet per day (Bcf/d) in the first six months of 2021, an increase of 2.8 Bcf/d, or 42%, from the corresponding period of 2020. In addition to improved market conditions, the increase in the first of half of this year was aided by production trains that came online in 2020, which added 2.7 Bcf/d of capacity.
As 2020 progressed, U.S. LNG producers took a "wait and see" attitude in regard starting new projects. The only North American project that gained a positive financial investment decision (FID) in the year was Sempra Energy's (NYSE:SRE) (San Diego, California) Costa Azul plant in Mexico. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Database can click here for the project report.
However, U.S. projects that had positive FIDs prior to the pandemic are under construction. These include:
In his presentation, Mullins highlighted the five projects he thinks have the best chance of coming to a positive FID. These include:
Market conditions in 2020 prompted Sempra to delay the FID for its Port Arthur facility from this year to 2022, a move which seems to have cost it a sales and purchase agreement. This week, Poland's largest gas company, PGNiG (Warsaw), announced that it was canceling its 20-year agreement for production from Port Arthur due to project delays. According to Reuters, the Polish company was to receive about 2 MTPA per year from the plant, beginning in 2023. "The decision was made due to delays in the project's development," PGNiG said in a statement. However, the two companies did sign a non-binding memorandum of understanding that PGNig would take 2 MTPA from other Sempra projects.
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.
While U.S. LNG exports started off fairly strong in the first quarter of last year, exports in the second quarter of 2020 plunged as COVID-19 gripped global commerce and lowered energy demand. Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas), the U.S.' largest LNG exporter, recognized $708 million in revenues that were associated with second-quarter 2020 LNG cargos for which customers did not take delivery. The first quarter of 2020 had brought about $51 million of these displaced revenues.
However, as the year progressed, things grew better for U.S. exporters, and consecutive export records were set in November and December. According to the EIA, colder-than-normal winter temperatures in Asia led to an increase in demand for spot LNG cargos, and stronger natural gas demand in the spring of 2021 continued amid low post-winter inventories. Europe also faced a cold winter and lower natural gas inventories, followed by high demand in May and June 2021 as high temperatures prompted increased power usage and lowered inventories.
According to the EIA, U.S. exports of LNG averaged 9.6 billion cubic feet per day (Bcf/d) in the first six months of 2021, an increase of 2.8 Bcf/d, or 42%, from the corresponding period of 2020. In addition to improved market conditions, the increase in the first of half of this year was aided by production trains that came online in 2020, which added 2.7 Bcf/d of capacity.
As 2020 progressed, U.S. LNG producers took a "wait and see" attitude in regard starting new projects. The only North American project that gained a positive financial investment decision (FID) in the year was Sempra Energy's (NYSE:SRE) (San Diego, California) Costa Azul plant in Mexico. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Database can click here for the project report.
However, U.S. projects that had positive FIDs prior to the pandemic are under construction. These include:
- Venture Global LLC's (Houston, Texas) Calcasieu Pass project in Louisiana, which is expected to begin production in 2022 (see project report.)
- Cheniere's Sabine Pass Train 6 in Louisiana, which is expected to come online next year (see project report.)
- Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) and Qatar Petroleum's (Doha, Qatar) Golden Pass facility in Louisiana, the first train of which is expected to come online in a few years (see project report.)
In his presentation, Mullins highlighted the five projects he thinks have the best chance of coming to a positive FID. These include:
- Venture Global's Plaquemine facility in Louisiana, which could see startup in 2025. The first phase of construction would consist of nine production modules, for an output of 10 million tons per annum (MTPA). (See project report.) Mullins said, "We may see an FID from Venture Global Plaquemine before the end of the year." Plans are in the works for another nine production modules, which would double capacity. (See project report.)
- Tellurian Incorporated's (NASDAQ:TELL) (Houston) Driftwood LNG plant in Louisiana, which could come online in 2025, the first phase of which would bring 5.6 MTPA of capacity. This could be followed by construction of subsequent trains, further boosting production capacity. Click here for related project reports.
- Freeport LNG's Train 4 in Texas, which would add 5.1 MTPA of capacity. (See project report.)
- Cheniere's mid-scale plant in Corpus Christi, Texas. The project would entail construction of seven smaller production trains to produce a combined 9.5 MTPA. The project could be completed in 2025. (See project report.)
- Sempra's Port Arthur project in Texas, which could add up to 13.5 MTPA. Click here for related projects.
Market conditions in 2020 prompted Sempra to delay the FID for its Port Arthur facility from this year to 2022, a move which seems to have cost it a sales and purchase agreement. This week, Poland's largest gas company, PGNiG (Warsaw), announced that it was canceling its 20-year agreement for production from Port Arthur due to project delays. According to Reuters, the Polish company was to receive about 2 MTPA per year from the plant, beginning in 2023. "The decision was made due to delays in the project's development," PGNiG said in a statement. However, the two companies did sign a non-binding memorandum of understanding that PGNig would take 2 MTPA from other Sempra projects.
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.
