Spending on LNG could peak in 2024 as world turns to green energy

Monday, 03 October 2022
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Restrictions on Russian gas exports have accelerated US LNG projects: Spending on greenfield LNG projects totalled $27 billion this year and will peak at $42 billion in 2024, Rystad Energy forecasts. But after this date, new LNG investments are anticipated to plunge to $2.3 billion in 2029 as countries scale up spending on low-carbon energy sources instead.

But regardless of the green energy transition, the US seeks to solidify its place as a top LNG exporter: The $10 billion Golden Pass LNG project in Texas, a joint venture between QatarEnergy (70 percent) and ExxonMobil (30 percent), is expected to start production by 2024, adding export capabilities to the Sabine Pass LNG terminal totalling around 18 mtpa.

Venture Global’s Plaquemines LNG in Louisiana – a $13.2 billion development sanctioned earlier this year – is anticipated to produce about 24 mtpa and start up in 2025.

And in a move that Rystad Energy thinks could “become more common in the crowded market,” Cheniere Energy signed a deal with Chinese state giant PetroChina to supply around 1.8 mtpa of LNG from its Corpus Christi LNG facility, with deliveries from 2026 to 2050.

Timely agreements for firm LNG offtake are vital to get new liquefaction capacity sanctioned in the US, where developers can rely on ample proved reserves. Steady gains in drilling activity have boosted US gas production to near record highs, meeting record demand of 86.6 Bcf/day in the American domestic market in 2022, while covering rising LNG demand abroad. But infrastructure bottlenecks, such as a lack of floating regas terminals and constraints in cross-border gas transport capacity – currently prevent the EU to rely more on imported LNG and resolve the risk of a supply crunch this winter.

Gauging the size of additional future supply, analysts said projects approved or currently being developed will recover about 300 Tcf of LNG, led by the US with pproximately 97 Tcf, then Qatar with about 52 Tcf and Russia at 50 Tcf. These top three nations hold around 70 percent of the total sanctioned, yet-to-be-produced global LNG resource. 

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