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Pandemic offers opportunities for developing world LNG exports

March 03, 2021

Pipeline & Gas Journal:

In August of last year, between COVID-19 pandemic surges, senior executives at San Diego, Calif.-based Sempra Energy, a leading North American utility and natural gas infrastructure holding company, were dissecting the future for U.S. exports of liquefied natural gas (LNG), given 2020’s severe downturn in global energy markets.  

They spoke to analysts on a quarterly earnings conference call with a basic message that the nation’s energy glass is half full. A second wave of global LNG demand is coming in the mid-part of this decade, they said. 

Bruce Robertson, an energy finance analyst, Gas/LNG, for the Institute for Energy Economics and Financial Analysis, indicates in a January report the usual stability in LNG contracts is likely to dissipate this year, giving way “to a renewed period of volatility as drilling activity has been low, gas industry investment in production and development has stalled and oil and gas companies continue to experience financial instability and poor financial health around the world.”  

Robertson concludes that gas buyers globally should be wary, noting that LNG projects in emerging markets increasingly are becoming “unbackable” with more volatile contract prices. 

[Richard Nemec]

More: US LNG Exports: Uneven Pathway from Oilfields to Terminals

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