Page 10 - GLNG Week 01 2021

GLNG COMMENTARY GLNG

Records for imports are also helping set – Sempra Energy’s Energía Costa Azul LNG
records for exports on the other side of the – that will also use feedstock gas from the US,
equation. The US Energy Information Admin- it appears that the idea of exporting US gas as
istration (EIA) estimated, based on Bloomberg LNG from Mexico is gaining traction. At least
Finance shipping data, that US exports of LNG one other potential LNG terminal on Mexi-
had set a new record in December, averaging co’s Pacific Coast has been under discussion
9.8bn cubic feet (278mn cubic metres) per recently.
day. This followed a previous record of 9.4 bcf In the US too, there may be some movement
(266 mcm) per day that US LNG exports set in on projects that are still awaiting FID. In late
November. The EIA said US LNG exports in December, Texas LNG signed a 50-year lease
December were more than three times higher agreement with the Port of Brownsville, becom-
than the reduced export levels seen during the ing the third of three proposed LNG ventures Demand for LNG
summer of 2020, when numerous buyers can- to do so. Texas LNG’s founder, Vivek Chandra,
celled cargoes that had been scheduled for load- described the lease agreement as an important to be regasified
ing at US terminals. step in the development of his company’s export and used in
project.
Long-term bullishness Texas LNG says on its website that it is target- heating and
While current conditions are particularly good ing an FID in 2021. Other US LNG projects had
news for LNG sellers in the short term, there are also been aiming for an FID this year, including power generation
signs that at least some developers are feeling Tellurian’s Driftwood LNG and NextDecade’s
more bullish about their longer-term prospects. Rio Grande LNG. However, given that FIDs is growing faster
This can be illustrated by planned export pro- rely on factors including obtaining sufficient than for any other
jects that are currently making progress, after customer commitments, further delays cannot
many were stalled in 2020 as market conditions be ruled out. fossil fuel.
deteriorated. That said, demand for LNG to be regasified
One recent development is the approval and used in heating and power generation is
that Singapore-based LNG Alliance received growing faster than for any other fossil fuel,
from the US Department of Energy (DoE) to according to Bloomberg, as numerous countries
export US gas to Sonora, Mexico for liquefac- look for a cheap, reliable and cleaner alternative
tion and onward shipment from the proposed to coal. This suggests that demand growth will
Amigo LNG project. Given that the only FID be there beyond the current spike, potentially
on a liquefaction project to be made last paving the way for more exporters to sign
year involved a different Mexican terminal offtake deals and reach FIDs.™

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