LNG Voyager Report

It’s crunch time in the race to advance the next-round of liquefaction/LNG export projects along the U.S. Gulf Coast to a Final Investment Decision (FID). And if we’re to assume that only a small number of these multibillion-dollar projects will get their financial go-aheads, it would seem eminently reasonable to put a win-place-or-show bet on a joint venture that includes the world’s leading LNG producer (by far) and one of the largest U.S. natural gas producers — oh, and the partners have very fat wallets too. Size and money aren’t everything, of course, but as we discuss in today’s blog, the team behind the Golden Pass LNG project plans to build its liquefaction trains at the site of an existing LNG import terminal with strong interconnections with coastal pipelines already in place.

Each of the “second wave” liquefaction/LNG export projects along the U.S. Gulf Coast now closing in on a Final Investment Decision (FID) believes it has an edge — that special something that will enable it to cross the finish line ahead of its competitors. Things like a prime location, access to an existing network of natural gas pipelines, lower capital costs, or going with smaller “midscale” liquefaction trains instead of traditional big ones. Some tout the experience and depth of their executive teams, while others claim that thinking outside the box is key. Time will soon tell which two or three (or four) projects advance to FID. Today, we continue our series on the next round of liquefaction/LNG export terminals “coming up” with a look at NextDecade’s plan for the Rio Grande LNG project in Brownsville, TX, which would export large volumes of Permian and Eagle Ford gas.

The race is on to be the first to reach a Final Investment Decision (FID) for the next round of U.S. liquefaction/LNG export terminals along the Gulf Coast. And like the Kentucky Derby, being first — or, at worst, second or third — is a do-or-die proposition, because only a very small number of these projects are likely to line up the multibillion-dollar commitments needed to push them over the FID line. The tried-and-true approach of LNG project financing has been to secure a stack of long-term Sales and Purchase Agreements (SPAs) from international LNG trading companies or huge overseas utilities, and that’s the tack being taken by Venture Global LNG, which is developing two projects near the Louisiana coast that, if built, would consume a total of nearly 4 Bcf/d of U.S. natural gas. Today, we continue our series on the next round of liquefaction/LNG export terminals “coming up” with a look at Venture Global’s Calcasieu Pass and Plaquemines projects.

With global demand for LNG rising and U.S. natural gas producers needing markets for their burgeoning output, it’s not a question of whether another round of U.S. liquefaction/LNG export facilities will be built, but which developer will be first and when it will make its final investment decision (FID). Odds are that the initial FID for this “next round” of projects is only months away, but as for the specific developer and project that will lead the pack, that has yet to be determined. We do know, however, that a handful of projects appear to be making real progress, and today we consider one of them: Tellurian’s Driftwood LNG project near Lake Charles, LA.

Federal regulators are preparing to accelerate their review of a wave of applications to build new liquefaction plants and LNG export terminals — most of them sited along the Gulf Coast and scheduled for commercial start-up in the early 2020s. Only a few of the multibillion-dollar projects are likely to advance to final investment decisions (FID), construction and operation, but even they will have profound impacts on U.S. natural gas production, pipeline flows, and the global LNG market. Today, we begin a look at projects still awaiting FIDs, their developers’ efforts to line up Sales and Purchase Agreements (SPAs), and the Federal Energy Regulatory Commission’s (FERC) push to review project applications in a timely manner. Warning: this blog includes a few ever-so-subtle promotions for RBN’s new LNG Voyager Report.