Eagle LNG Asks FERC for Extension to Build Small-Scale LNG Facility in Florida

Just like there’s room for Amazon and Etsy in the e-commerce world — one for mass marketers and the other for artisans — there’s room in the energy industry for both large- and small-scale LNG companies and plants. By focusing on the development of niche markets and scaling their production and distribution operations accordingly, a number of smaller (but growing) players in the LNG space have been making natural gas available to a surprising variety of customers: from industrial, oil-and-gas and mining companies to rocket launchers, Caribbean resorts and island utilities. ESG is a big driver — the LNG supplied often replaces diesel, fuel oil and propane, which can have bigger carbon impacts. In today’s RBN blog, we continue our series on small-scale LNG with a look at a cross-section of key players in this space and how they’ve been growing their businesses.

There’s a tough race underway among U.S. LNG developers jockeying for position in the global LNG market. U.S. supply growth has spurred the development of more than two dozen LNG export projects, the bulk of them along the Texas/Louisiana Gulf Coast. But regulatory bottlenecks and deepening oversupply conditions in international markets are creating strong headwinds and slowing the momentum for some of these massive projects, making it harder and harder for them to reach the regulatory and commercial milestones they need to pass before they can progress to the construction phase. That said, several projects have eked out big wins in recent weeks, including Tellurian’s $7.5 billion memorandum of understanding with India’s Petronet LNG Ltd for its Driftwood LNG project, signed just this past weekend, and LNG Ltd.’s 2-MMtpa sales and purchase agreement for its Magnolia LNG, inked early last week. Today, we provide highlights of recent regulatory and commercial developments that are pacing the proposed export capacity additions.

Despite the pandemic-driven economic slowdown wreaking havoc on the global LNG market, U.S. LNG export volumes from operating terminals have proven resilient, so far. Total feedgas deliveries to the liquefaction and export facilities peaked at 9.44 Bcf/d less than a month ago and are averaging about 8.3 Bcf/d in April to date. But for many of the already-struggling second wave of U.S. liquefaction projects still under development, the one-two punch of the crude oil price crash and COVID-related lockdowns has further stymied — or in some cases even reversed — their progress toward securing long-term capacity commitments and reaching final investment decisions anytime soon. Today, we provide an update on the status of the next round of prospective LNG export projects.