It has been an epic year for U.S. LNG. After COVID-19 and the subsequent global market crash brought LNG development to a standstill and shut-in production from existing terminals in 2020, this year has seen global prices repeatedly smash previous record highs, driving existing terminals to operate at peak levels and renewing interest in new LNG buildout. U.S. feedgas demand and LNG production will close out the year at all-time highs, but with just a few weeks left it looks like 2021 will be the first year since 2017 that no new LNG terminals will achieve a positive final investment decision. But that’s driven more by the tailwinds of 2020 — the back half of 2021 has seen a tremendous amount of commercial activity in the LNG sector. More than 21 million metric tons per annum of medium- and long-term capacity from planned LNG projects has been sold this year, creating enough forward momentum for multiple projects to move toward FID in 2022. We cover all the latest developments in our LNG Voyager Quarterly report, and in today’s RBN blog we take a look at some of the recent LNG deals and what they tell us about the future of North American LNG.
In our LNG Voyager Quarterly supplement, we track LNG projects that are in operation, under construction/with FIDs already taken, or in various stages of pre-FID development. We categorize them into the following groups: operational (green triangles and names on the map), those that have already reached FID and are under construction (blue), those that are pre-FID but “probable” to reach FID in the next year (dark orange), and ones that are “possible” to be greenlighted in the next year. Within that last bucket, we further group them into Tier 1 (light orange), Tier 2 (dark yellow), and Tier 3 (cream), based on the likelihood that they will achieve FID in the next one to three years. There has been a lot of movement this year, with projects being taken off the list, added to it, or being moved up and down the charts. As it now stands, we have four projects categorized as probable that look poised to achieve FID in the next year (including Corpus Christi Stage III, which is shown in green in Figure 1 because it is part of an operational terminal) and still more in Tiers 1 and 2 that have at least a decent shot of getting a green light in 2022.
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