Page 7 - NorthAmOil Week 06 2021
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NorthAmOil COMMENTARY NorthAmOil
capacity of 10mn tpy. It would be better posi- caused by a combination of colder-than-ex-
tioned than projects on the West Coast to target pected winter weather in Asia, supply outages at
markets in Europe, where LNG demand and some facilities and shipping delays, looks likely
receiving capacity has grown recently. Indeed, to bolster the case for new LNG export plants.
Germany’s Uniper is the offtaker for all of the Indeed, in the medium term, some analysts are
output from Train 1 at Goldboro for a 20-year predicting that new supply will be needed to
period. However, operator Pieridae says on its meet growing demand, especially as more coun-
website that its target markets also include those tries make the shift from coal to natural gas for
in South America and Asia, even though West power generation.
Coast projects offer a far shorter route to Asian And it is only in the medium term that Can-
markets. ada is expected to join the LNG market, with
Contractor Bechtel is in the process of devel- LNG Canada set to come online in 2025 and Canada has once
oping a comprehensive engineering, procure- Woodfibre – if it goes ahead as currently sched-
ment, construction and commissioning (EPCC) uled – also starting up that year. Similarly, Gold- again missed a
execution plan, which is due by March 31, 2021. boro LNG’s entry into service is anticipated in window of spiking
The final, lump-sum turnkey (LSTK) contract late 2025 or early 2026 if an FID is reached on
price proposal for the project’s EPCC execution schedule this year. LNG demand and
plan is then due by May 31. If it is delivered on The fate of some of the other projects that are
schedule, Pieridae says an FID is expected in still on the table is less certain, though. Notably, prices.
June. Kitimat LNG is currently stalled, with operator
Chevron saying in December 2019 that it would
What next? seek to offload its entire 50% stake in the project.
The recent volatility in the LNG market – with The other 50% partner in Kitimat LNG, Austral-
Asian spot prices rising to record highs – ia’s Woodside Energy, previously affirmed its
appears to have strengthened the two projects’ commitment to the project, but this occurred
prospects for being built. Last year, COVID-19 before the pandemic and related downturn.
exacerbated the oversupply in the LNG market, In any case, Canada has once again missed
with some buyers cancelling a number of car- a window of spiking LNG demand and prices.
goes due to be loaded in the US over the sum- The concern is that any further delays to con-
mer. This raised questions over the need for all struction of LNG Canada and any other projects
of the new liquefaction capacity that is currently that proceed in the nearer term could cause the
proposed. country’s would-be exporters to miss future
However, the demand spike in January, demand spikes too.
Week 06 11•February•2021 www. NEWSBASE .com P7
