Page 9 - NorthAmOil Week 05 2021

NorthAmOil COMMENTARY NorthAmOil

the LNG spot price spike would boost the pros- primarily LNG backfill projects for existing ter-
pects for supply contracts being signed, saying minals, including Mitsui & Co.’s Waitsia, Santos’
the level of customer interest in Driftwood had Barossa and Woodside Energy’s Scarborough.
increased “pretty dramatically” recently. He also While the US and Australia are set to lead the
believes Driftwood to be the project closest to way, with Russia and Qatar also expanding their
starting construction. liquefaction capacity, a handful of projects else-
This comes as no surprise following the pres- where in the world are also waiting in the wings.
sure the spot market has come under recently, Among these is ExxonMobil’s Rovuma LNG
and analysts more widely have also been saying in Mozambique, on which an FID was delayed
that despite a desire for flexibility, buyers will be last year. While at the time the decision was said
more willing to lock in future supplies. to be deferred until 2021, Rovuma’s fate seems
Other companies besides Tellurian that could increasingly uncertain given growing security
benefit from this include NextDecade, which is risks in the region and ExxonMobil’s aggressive
targeting an FID for Rio Grande LNG at the capital expenditure cutting.
Port of Brownsville in Texas in 2021. NextDec- Other projects that are currently reported to
ade has suffered some high-profile setbacks be targeting an FID in 2021 may yet be delayed
recently, with France’s Engie pulling out of talks further still, but certainly their prospects of
over a supply deal, while a preliminary contract moving forward look better now than they did In the longer
to develop an import facility in Ireland has even a few months ago.
expired. However, the company continues its term, Baker
efforts to advance Rio Grande, as well as work- What next? Hughes expects
ing to make the facility carbon-neutral, having In the longer term, Baker Hughes expects nat-
already redesigned it to lower its greenhouse gas ural gas to be a “transition and destination fuel” natural gas to
(GHG) emissions by 90%. for broader energy consumption. Simonelli
Two other proposed projects at the Port of pointed to current trends such as accelerated be a “transition
Brownsville – Texas LNG and Annova LNG – coal-to-gas switching across several countries
have also previously said that they are targeting and LNG demand faring much better than other and destination
FIDs in 2021. Indeed, Texas LNG signed a long- commodities during the 2020 downturn as rea- fuel” for
term lease agreement with the port in Decem- sons for longer-term confidence in the super-
ber, suggesting that its project was close to being chilled fuel. broader energy
sanctioned. “As you look at it from a longer-term per-
Also in the US, Venture Global LNG is hoping spective, by 2030 we still need to have capacity consumption.
to sanction a second liquefaction plant in Lou- of approximately 650-700mn tonnes of LNG in
isiana this year. place,” Simonelli said in response to an analyst
In Australia, meanwhile, $11bn worth of gas question. “And so you’re looking at 50-100mn
projects are poised for an FID in 2021 accord- tonnes [of] FIDs over the course of next three to
ing to consultancy Wood Mackenzie. While four years. So we feel that that trajectory is very
this figure includes one import project planned much in place and feel good about our opportu-
for the country’s East Coast, the remainder are nities in this space continuing.”™

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