Page 5 - AsiaElec Week 02 2021

AsiaElec COMMENTARY AsiaElec

Demand for LNG from China and South
Korea in particular is also reported to be rising. the US Department of Energy (DoE) to export
Indeed, Reuters reported separately last week US gas to Sonora, Mexico for liquefaction and
that China’s monthly imports of LNG had hit a onward shipment from the proposed Amigo
record high of over 9mn tonnes in December, LNG project. Given that the only FID on a liq-
according to shiptracking data from Refinitiv uefaction project to be made last year involved
Eikon. This figure means China overtook Japan a different Mexican terminal – Sempra Energy’s
as the world’s top importer of the super-chilled Energía Costa Azul LNG – that will also use
fuel for a second straight month in December. feedstock gas from the US, it appears that the
The data also showed that Japan was set to idea of exporting US gas as LNG from Mexico
import record monthly volumes of around is gaining traction. At least one other potential
8.1mn tonnes in December. LNG terminal on Mexico’s Pacific Coast has
Records for imports are also helping set been under discussion recently.
records for exports on the other side of the In the US too, there may be some movement
equation. The US Energy Information Admin- on projects that are still awaiting FID. In late
istration (EIA) estimated, based on Bloomberg December, Texas LNG signed a 50-year lease
Finance shipping data, that US exports of LNG agreement with the Port of Brownsville, becom-
had set a new record in December, averag- ing the third of three proposed LNG ventures
ing 9.8bn cubic feet (278mn cubic metres) per to do so. Texas LNG’s founder, Vivek Chandra,
day. This followed a previous record of 9.4 bcf described the lease agreement as an important
(266 mcm) per day that US LNG exports set in step in the development of his company’s export
November. The EIA said US LNG exports in project.
December were more than three times higher Texas LNG says on its website that it is target-
than the reduced export levels seen during the ing an FID in 2021. Other US LNG projects had
summer of 2020, when numerous buyers can- also been aiming for an FID this year, including
celled cargoes that had been scheduled for load- Tellurian’s Driftwood LNG and NextDecade’s
ing at US terminals. Rio Grande LNG. However, given that FIDs
rely on factors including obtaining sufficient
Long-term bullishness customer commitments, further delays cannot
While current conditions are particularly good be ruled out.
news for LNG sellers in the short term, there are That said, demand for LNG to be regasified
signs that at least some developers are feeling and used in heating and power generation is
more bullish about their longer-term prospects. growing faster than for any other fossil fuel,
This can be illustrated by planned export pro- according to Bloomberg, as numerous countries
jects that are currently making progress, after look for a cheap, reliable and cleaner alternative
many were stalled in 2020 as market conditions to coal. This suggests that demand growth will
deteriorated. be there beyond the current spike, potentially
One recent development is the approval that paving the way for more exporters to sign
Singapore-based LNG Alliance received from offtake deals and reach FIDs. ™

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