LNG

The new US administration is pushing for deregulation and American energy dominance on global markets by fast-tracking permitting for LNG terminals and related infrastructure. Such policies are poised to boost oil and gas production and underpin US LNG export growth. 

The US Department of Defense (DoD) has added Chinese shipping giants COSCO Shipping Corp, plus two of its subsidiaries, and China National Offshore Oil Corp’s (CNOOC) trading arm to the list of companies linked to China’s military involvement.

This step formalises the designation in an effort to discourage US involvement with the companies on the annual list, which was published in the US Federal Register yesterday.

The markets was still assessing the impact on oil and gas trading, plus shipping, plus the situation ahead of President Elect Donald Trump’s new administration.

This blacklist was described as different from the Specially Designated Nationals list compiled by the US Department of Treasury’s Office of Foreign Asserts Control that previously impacted oil and gas/LNG trade flows or shipping companies, by penalising violation of sanctions on Iran or Russia.

A DoD blacklist targets companies that are deemed to impact national US security and likely to disrupt business. It could also result in higher operational costs, compliance issues and reputational damage, S&P Global explained.

CNOOC contract with Venture Global under scrutiny

The list includes CNOOC subsidiaries, CNOOC China, CNOOC International Trading and COSCO subsdiaries, COSCO Shipping (North America) and COSCO Shipping Finance, as well as the main state-owned companies.

CBOOC is one of the world’s largest oil traders while the company’s Gas & Power affiliate handles LNG trading. It has negotiated two term sales and purchase (SPA) contracts with US exporter Venture Global – a 20-year FOB contract for the supply of 2 million tonnes of LNG per year from Plaquemines and a three year 500,000 tonnes per annum FOB contract from Calcasieu Pass. This contract has now come under regulatory scrutiny, adding a supply risk to Chinese LNG importers, industry and power generators further downstream on the gas value chain. 

Well-below temperatures at the US east coast has propelled up demand for natural gas at the start of 2025 and impacted energy prices. At the same time, colder weather can result lower production if the major supply areas, such as the Marcellus, Haynesville, and/or Permian suffer from freeze-offs due to abnormally low temperatures.

As early as 2028, the United States will be home to 232 billion cubic meters per year (bcm/y) of LNG export capacity, up from 126 bcm/y today – far ahead of the Emirate of Qatar with 171 bcm/y. On the supply side, analysts anticipate an 80% surge in volumes coming to the market by 2030.

Prioritising LNG and small modular reactors to power South Korea’s semiconductor clusters and data centres is a “high-cost, high-risk, and high-carbon strategy,” IEEA analysts warn. This hold true especially if Korean utilities have to get LNG cargoes shipped across the Pacific Basin from the United States, as compared with cargoes from nearby Australia.

Cheniere Energy has produced the first LNG from Train 1 of the Corpus Christi Stage 3 liquefaction project (CCL Stage 3).

The commissioning process continues, the company said, adding that Train 1’s substantial completion was expected to be achieved at the end of the first quarter of 2025, over six months ahead of the guaranteed completion date. Full notice to proceed on CCL Stage 3 was issued in June, 2022, to engineering company Bechtel.

CCL Stage 3 consists of seven mid-scale trains, with an expected total LNG production capacity of over 10 mtpa. Upon substantial completion, the expected total LNG production capacity of the Corpus Christi liquefaction facility will be over 25 mtpa. 

Growth in US LNG production is essential to balance global markets and provide emerging Asia with an alternative to coal, the region’s dominant fuel for power generation. Wood Mackenzie forecasts Asia's LNG demand will grow from 270 mtpa this year to 510 mtpa in 2050 – and without resources to be self-sufficient, the region must rely on imported LNG to cover its energy needs. 

Shortly before the end of his term in office this month, US President Joe Biden is pushing through US waters’ protection measures against further oil and gas extraction.

Juxtaposing the carbon capture and storage (CCS) capacity with LNG production illustrates of the scale of the ambition for CCS, Wood Mackenzie says, comparing the growth of two large industrial systems handling gas in a cooled liquid state. “Even in the delayed energy transition scenario, CCS capacity is expected to be three times greater than LNG supply volumes by 2050," analysts noted, "while in the base case, it will be four times greater."

• November-December exports amounted to 17.08mmt • Up by 1.30mmt (6pct) from September-October period • Shipments down by 0.37mmt (-2pct) over period year-on-year • Avg. US LNG capacity utilisation at 108pct for the report period 

Period between 1 November 2024 and 31 December 2024, inclusively.