July 7, 2020 Read More →

Financing for global LNG projects becoming hard to find—report

Reuters:

Prospects for nearly half of the world’s projects to build infrastructure for exporting liquefied natural gas have faltered in recent months, amid rising concerns about climate change, public protests and delays due to the coronavirus pandemic, according to a report published Tuesday.

Out of 45 major LNG export projects in pre-construction development globally, at least 20 – representing a capital outlay of some $292 billion – are now facing delays to their financing, researchers at Global Energy Monitor found.

That marks a stark shift by investors away from what many had considered a promising fuel market, already buffeted by slower growth in demand, rising competition from renewable energy technologies and opposition over the industry’s climate-warming emissions.

The vice president of the European Investment Bank said the report underlined the unacceptable risk of investing in LNG assets. “Investing in new fossil fuel infrastructure like liquefied natural gas (LNG) terminals is increasingly an economically unsound decision,” Andrew McDowell told Reuters in an email.

The bank had announced in November that it would stop financing fossil fuel projects at the end of 2021.

In total, companies had announced plans to build $758 billion of projects that are as yet in the pre-construction phase. But with 20 projects now in jeopardy, including nine in the United States, that planned capital outlay could be reduced by $292 billion, or 38%, if the delays persist indefinitely, the researchers told Reuters. As for future projects, 12 companies had said at the start of this year that they planned to make final investment decisions in 2020 to build new LNG export plants in North America, according to a Reuters survey. That total is now down to four, and analysts only expect one project to move forward this year.

[Matthew Green and Scott DiSavino]

More: Global LNG projects jeopardized by climate concerns, pandemic delays – report

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