You Can Make It If You Try - New Contracts Inch North American LNG Projects Closer to FID

U.S. LNG is in the midst of a record-breaking year. Total LNG feedgas has averaged nearly 10 Bcf/d so far in 2021 and the country is on track to export somewhere around 1,000 cargoes this year, 40% more than last year. Although pipeline maintenance and flow constraints have knocked feedgas off the all-time highs seen earlier this year, feedgas and exports are likely to hit new record levels to close out the year as Sabine Pass Train 6 and Calcasieu Pass prepare to start service in early 2022. The strength in U.S. LNG export demand this year is underpinned by an incredibly bullish global gas market, which has led prices in both Europe and Asia to hit all-time highs. This has not only benefited the existing fleet of terminals, but the prolonged bullish global gas market has accelerated commercial activity for future LNG projects. Since May, more than 12 MMtpa of capacity from LNG terminals or liquefaction trains under development has been sold, pushing several prospective LNG projects closer to a final investment decision (FID). RBN covers all of the latest in our LNG Voyager Quarterly report, but in today’s blog, we take a look at some of the highlights from the report, focusing on the biggest changes in LNG development this summer.

In our LNG Voyager Quarterly supplement, we track the 10 LNG terminals that have already taken FID and the still-standing (some albeit only barely) pre-FID projects (shown on the map in Figure 1). We categorize them into the following groups: operational (in green 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 the “possible” 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 1-3 years.