The United Arab Emirates’ main oil company bought a stake in NextDecade Corp.’s (NYSE:NEXT) natural gas export project in Texas, in a first US acquisition that also gives it a 20-year supply deal.
The Biden administration’s pause on liquefied natural gas export licenses needs to end after November’s presidential election, said Ryan Lance, chief executive of ConocoPhillips, the Houston-based oil and gas producer with a growing LNG business.
“Two or three years ago all you would hear about [from policymakers] was decarbonisation. Now, I think there’s much more balanced conversation around security of supply, affordability and decarbonisation,” Hill said.
“Currently, this approach is more attractive than issuing equity to fund our 2024 development activities and working capital needs,” Simões added.
Business organizations from the US, Europe and Japan called on the Biden administration to reverse a decision to freeze approvals of new licenses for liquefied natural gas export facilities.
Europe, long-reliant on Russian natural gas, has nearly severed its dependency on the Kremlin in less than two years. Its preferred replacement — gas from the US — is widely viewed as abundant, politically palatable and less likely to be choked off than pipelines from Siberia.
“The administration’s decision to freeze review of new LNG terminals is deeply disturbing and raises significant risks around the globe,” said Marty Durbin, president of the US Chamber of Commerce’s Global Energy Institute.
“Longer supply lines tie up more vessels, boost freight rates, widen origin-destination spreads, and lift bunker demand,” Bank of America Global Research analysts said.
“As the market has grown and evolved and become more sophisticated we’re no longer source specific and the customers are often no longer destination specific as well,” said O’Neill.
BP Plc (LON: BP) asked US energy regulators to intervene in its dispute with Venture Global LNG Inc. over liquefied natural gas cargoes, escalating a feud that’s roiled the market for the super-chilled fuel.
US LNG is almost four-times more carbon-intensive than domestic UK gas production.
“More than 20 months after their first cargo, Venture Global’s claim to still be commissioning a facility that, according to publicly available data, has been producing at around nameplate capacity for more than a year is simply unbelievable and increasingly untenable.”
Young said his country would work with Venezuela “to advance the development and production of Venezuelan natural gas for export and utilisation in Trinidad and Tobago. We have reached a significant agreement and milestone.”
BP said it was on the look out for more opportunities in the gas value chain. It aims to reach 30mn tpy of LNG in its portfolio by 2030.
Simonelli said natural gas would be both a bridge and a destination fuel in the energy transition.
Other partners include Global Infrastructure Partners (GIP), GIC and Mubadala. These companies will provide $4.8bn and will receive 62.5% of funds generated from the Rio Grande LNG first phase. The largest commitment comes from GIP, which is stumping up $3.5bn.
Centrica has struck a long-term sale and purchase agreement for a million tonnes a year of liquefied natural gas (LNG) from the US.
Tusiani said a third wave of US LNG export plans would need equity to get off the ground. “It’s not a slam dunk. There’s a lot of environmental hurdles, there’s a lot of issues, uncertainty with buyers.”
A statement from EarthJustice said the Alaska LNG plan “now has most of the approvals needed for it to move forward. The ultimate fate of the project, however, is far from certain.”
“Our team will continue to deliver on our mission to bring more clean, low-cost US LNG to the global market in the coming years to support the world’s rapidly growing demand for energy.”
The LNG company CEO Mike Sabel said Venture Global was “thrilled” to be Excelerate’s “inaugural long-term LNG supplier”.
“The combination of low fees and increasing costs mean we estimate unlevered internal rates of return (IRRs) as low as 5-6% for some projects. Based on these returns, some projects are finding it challenging to secure finance, particularly via equity raises,” said Harrison.
More investments in liquefaction is needed to head off a supply-demand gap that the company sees emerging in the late 2020s. Last year, the company put this supply-demand gap opening up by mid-decade.
Germany has reduced its imports of Russian energy to zero and imported its first full cargo of LNG to Uniper’s new terminal at Wilhelmshaven.
Japanese companies have struck a number of LNG deals, as the government pushes to lock in future energy supplies.