Page 5 - FSUOGM Week 13 2022

FSUOGM COMMENTARY FSUOGM

Ventural Global's
Calcasieu LNG
terminal.

(FTA), noting that this included all of Europe. created further confusion about the com-
(See NorthAmOil Week 11) However, while mission’s approach to the siting of natural gas
Cheniere welcomed the additional operational projects”.
flexibility the authorisation gives it, there is only While the new guidelines may yet be brought
so much more LNG it can export from its exist- in once the comment period is complete, the
ing trains. That said, the company does appear FERC faces growing pressure not to take steps
increasingly closer to taking FID on the Stage 3 that could hamper efforts to send more US LNG
expansion of its Corpus Christi LNG terminal. to Europe. The question is whether the regulator
will be able to strike a balance between allow-
Standing to benefit ing the US to keep ramping up exports through
Indeed, it is those projects that have yet to reach new capacity additions while providing new cer-
FID that could benefit the most from the latest tainty on the environmental impact of projects
efforts to send additional US LNG supplies to is assessed.
Europe. Cheniere, Venture Global and Tellurian
are all thought to be close to proceeding to con- What next?
struction on proposed projects, plus a handful of Either way, US efforts to ramp up LNG exports to
other developers are also trying to advance plans Europe will not bear fruit overnight. This has led
for new capacity, but have a longer way to go to analysts to speculate that the additional volumes
reach FID. If supply deals with European buyers the country wants to send to Europe this year
are expedited, though, this would significantly will involve the redirection of existing supply.
speed up progress. But redirection of LNG under contract is
On the regulatory side, meanwhile, it also complicated – though it can be done, as demon-
looks like efforts to send more gas to Europe are strated by China’s Sinopec recently reselling
being taken into consideration. some of the cargoes it is due to load from the Cal-
The US Federal Energy Regulatory Commis- casieu Pass terminal over the summer. Nonethe-
sion’s (FERC) chairman, Richard Glick, said on less, it is thought that already high European gas
March 24 that two guidelines the regulator had prices would need to rise further still in order for
approved last month to consider greenhouse gas more redirection to Europe to happen.
(GHG), environmental justice and landowner Additionally, 15 bcm is still a small volume com-
issues before authorising LNG terminals and pared with how much gas Europe imports from
other gas projects would now be considered Russia. Even if the amount is achievable, "it still falls
“drafts”. These draft guidelines will not apply well short of replacing Russian gas imports, which
to pending projects until FERC issues any final amounted to around 155 bcm in 2021", Reuters
guidance. A comment period on the new guide- quoted analysts at ING Bank as saying.
lines is now underway until April 25, with a reply An Oxford Institute for Energy Studies
due on May 25. (OIES) research fellow, Jonathan Stern, agreed
Glick said the regulator had decided to gather in comments cited by Bloomberg. “All contribu-
comments from all interested stakeholders “in tions will be welcome but the task is huge,” Stern
light of concerns that the policy statements said. ™

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