LNG

Contract flexibility, strong demand and reliable project execution are bolstering credit profiles of US and Canadian LNG producers, Fitch Ratings said. Longer-term credit upside could fade as competition intensifies, build costs rise and demand visibility weakens, leaving producers reliant on tighter capital discipline and low-cost expansions, analysts warn.

Financing models of the U.S. shale oil & gas industry has for long been characterised by negative free cash flow as expectations of rising production and cost improvements led to continuous overspending in the sector. Over the last few month, however, IEA analysts have notice a “notable improvement in financial condition,” though the overall health of the industry remains fragile.