Page 12 - NorthAmOil Week 02 2021

NorthAmOil COMMENTARY NorthAmOil

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

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