Page 7 - NorthAmOil Week 23 2021
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NorthAmOil COMMENTARY NorthAmOil
74.6%, spiking at the end of the year alongside portion” of the pre-FID projects was unlikely to
Asian spot prices and demand for LNG. This progress. It noted how capital-intensive major
helped offset the impact of nearly 160 cargo LNG projects are, while developers have been
cancellations earlier in the year, especially dur- rethinking their capital allocation plans. How-
ing June-August, which is traditionally a period ever, the group said small-scale LNG remained a
of low seasonal demand that was significantly growing segment within the wider LNG indus-
exacerbated by the pandemic. try as a result of these trends.
The IGU’s report sought to highlight the role
Looking ahead LNG can play in both the post-pandemic recov-
The global LNG industry is anticipated to grow ery and the energy transition. The group noted
further still, though there are uncertainties this in reference to both LNG as a marine fuel
related to the energy transition to be navigated in a decarbonising world and to gas use more
in the longer term. The IGU estimated that as of broadly.
February 2021, there was 892.4mn tpy of lique- These arguments will be contested by those The IGU warned,
faction capacity awaiting a final investment deci- advocating a shift away from fossil fuels alto-
sion (FID), with the US and Canada accounting gether in favour of renewables, but thus far con- however, that a
for the majority. sumption trends appear to support the IGU’s “large portion”
It is worth noting that this figure will now expectations that gas demand will continue to
be smaller, as a few North American projects grow. The group said that global regasification of the pre-FID
were scrapped after February. Nonetheless, a capacity had risen to 850.1mn tpy as of Febru-
considerable amount of liquefaction capacity ary 2021, with 19mn tpy added in 2020. As with projects was
is still awaiting FID, with a backlog of projects liquefaction, some projects previously targeted
deferred from 2020 adding to this. Indeed, only for start-up in 2020 were pushed back to 2021, unlikely to
one new liquefaction project – Sempra Energy’s and the IGU said it anticipates future regasifi- progress.
Energía Costa Azul LNG in Mexico – reached cation capacity additions in both established
FID last year, which the IGU said was one of the regions and new markets. The group identified
worst years recently for sanctioned liquefaction Ghana, El Salvador, Vietnam and Nicaragua as
capacity. likely new importers that could emerge by the
Things are already turning around in 2021, end of 2021.
with Qatar Petroleum (QP) announcing an FID The dialogue and policy around the energy
on its North Field East expansion – the largest transition are changing rapidly, but for now,
LNG project in the world – in February, while this appears to have done nothing to dampen
a number of developers are still targeting FIDs the appetite for LNG. This could change in the
later in the year. coming years, but for now the IGU appears con-
The IGU warned, however, that a “large fident of the fuel’s role in the world.
Week 23 10•June•2021 www. NEWSBASE .com P7