Page 4 - NorthAmOil Week 10 2021

NorthAmOil COMMENTARY NorthAmOil

US LNG in pursuit of

competitive edge

Last week’s CERAWeek by IHS Markit conference

heard how current and future producers of US LNG

are trying to get ahead of the global competition

US RISING competition in the global LNG market De-bottlenecking is also helping reduce
has been evident for some time, and a number Cheniere’s emissions intensity, at a time when
WHAT: of countries has emerged as major suppliers of the company is trying to do more to burnish
US LNG producers the super-chilled fuel in recent years, including its environmental credentials. It announced in
are taking a variety the US. Last week, audiences at the CERAWeek February that it would start supplying emissions
of approaches to give by IHS Markit conference, which was held virtu- data associated with its cargoes to buyers.
themselves a competitive ally for the first time amid the ongoing corona- “As we get better with optimising our main-
edge. virus (COVID-19) pandemic, heard about what tenance and we get better at de-bottlenecking
certain US LNG producers are doing in order those trains, that carbon intensity number
WHY: to give themselves an edge in this increasingly comes down very dramatically,” Fusco said.
Competition in the competitive market. Looking ahead, he expects Cheniere to con-
global market has risen The approaches are varied, but the outlook for tinue driving innovation, especially on climate.
considerably in recent US LNG exports over the long term appears to “We’ve been a leader in US LNG. We’re going
years. be bullish across the board. Indeed, the recent to maintain that leadership position and we’re
LNG spot price spike in Asia amid high winter going to drive the industry to be more sustain-
WHAT NEXT: demand and supply shortages appears to have able and to quantify and be more transparent
LNG producers believe renewed interest in long-term contracts. Both on its overall carbon emissions,” Fusco said. He
their fuel will be needed new LNG developers and existing ones that added that his company would continue trying
for many years to come wish to expand their liquefaction capacity could to meet its customers’ needs, whatever those are.
and will complement stand to benefit. “Whether it’s short-term contracts, mid-term
renewables. contracts, long-term contracts – we’re going
Competitive edge to be there to meet those customers’ require-
There are various steps LNG producers can take ments,” he said.
to be competitive, and US players are illustrat- Cheniere is well-established at the forefront
ing this. Cheniere Energy – the first and largest of the US LNG export industry, but even those De-bottlenecking
exporter of LNG in the Lower 48 US states – has that are only now preparing to join the ranks of
taken steps to expand capacity at its existing liq- US exporters are talking up their competitive is also helping
uefaction trains, even as it continues building advantages. Also speaking at CERAWeek was reduce Cheniere’s
new trains. Venture Global LNG’s executive co-chairman
“We’ve been able to increase the output of our and CEO, Michael Sabel, who touted his com- emissions
trains by roughly 12%,” Cheniere’s president and pany’s cost-cutting efforts as it builds the Calca-
CEO, Jack Fusco, said during a CERAWeek ple- sieu Pass export terminal, which is due to enter intensity.
nary session. He went on to say that by the time service in 2022.
Cheniere had all nine trains operating across its “We’re taking advantage of the entire US gas
two Gulf Coast export terminals, it would actu- production E&P space, as well as the hundreds
ally have 10 trains’ worth of production. of thousands of miles of embedded pipeline
“Just through our de-bottlenecking efforts infrastructure,” Sabel said. He went on to say
we’ve been able to create – I call it a virtual that building a liquefaction plant next to a gas
train – another 5mn tonnes,” he said. “Those market was helping Venture Global with its
‘portfolio tonnes’, we’ll say, that aren’t used to focus on driving down costs, and indeed that it
help finance infrastructure, we’ve been very could leverage cost-cutting successes further up
successful at selling into some of the markets the gas supply chain.
that maybe aren’t as creditworthy and they need But beyond this, his company is focused on
natgas,” Fusco continued. “We’re happy to help how to make the liquefaction part of the sup-
meet their needs on a shorter-term basis if we ply chain less expensive, he said. According to
don’t have to use it to build our infrastructure.” him, Venture Global took a different approach

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