Page 14 - GLNG Week 50 2020

GLNG COMMENTARY GLNG

US LNG exports have
rebounded from lows
over the summer to
reach a new record in
November.

as efficiency improvements and adoption of new optimism is the fact that vaccines against the
technologies in other sectors. coronavirus (COVID-19) are being rolled
“With weaker global gas demand, the space out. And while their effectiveness has yet to be
for new developments will be limited,” Wood demonstrated outside of clinical trial settings,
Mackenzie’s principal analyst, Kateryna Filip- the roll-out has buoyed hopes of restoring some
penko, said. “This is a significant challenge for sense of normality to the world after a year of
companies considering FID on new projects.” unprecedented pandemic-related disruption in
The consultancy said low-cost supplies Rus- 2020.
sia and Qatar would be best positioned to fill Indeed, the first FID this year on a new LNG
the supply gap under the 2-degree scenario, export project came last month, when Sem-
although low Henry Hub prices would also pra Energy sanctioned its Energía Costa Azul Further adding to
mean competitive US LNG projects. (ECA) LNG project in Mexico. Several other
However, it added that this scenario would export projects in the US are currently sched- the growing sense
raise question over the need for other new liq- uled to follow next year – though further delays of optimism is
uefaction projects elsewhere, for example with to their timelines cannot be ruled out.
only a few Australian backfill projects going Other signs also appear to indicate that Wood the fact that
ahead. Mackenzie is right to be confident over a short-
term recovery. The US Energy Information vaccines against
Short-term optimism Administration (EIA) said this week that US
The outlook is much brighter in the short term, LNG exports had set a new record in November, the coronavirus
however. Crooks noted in his opinion piece that exceeding a previous high reached in January (COVID-19) are
LNG prices in Asia have risen from lows around before shipments collapsed over the summer.
$2 per million British thermal units ($55.32 per The EIA estimates that November US LNG being rolled out.
1,000 cubic metres) earlier this year to over $9 exports reached 9.4bn cubic feet (266mn cubic
per mmBtu ($248.94 per 1,000 cubic metres) in metres) per day, which it said was 93% of peak
December. LNG export capacity utilisation. The EIA cited
Meanwhile US Henry Hub benchmark gas strengthening spot prices, easing COVID-19
prices remain at around $2.60 per mmBtu restrictions and unplanned outages elsewhere
($71.92 per 1,000 cubic metres), which Crooks in the world as being among the reasons for the
noted makes the economics of US exports look relatively rapid rebound in US LNG exports.
attractive again. It seems likely that the rebound will continue
Further adding to the growing sense of over the coming months.™

P14 www. NEWSBASE .com Week 50 18•December•2020