Time Ticking on US LNG Export Window of Opportunity

Eighty percent of global LNG supply will be sourced from five areas, including the United States, Canada, East Africa, Australia and Russia.

Australia has seen tremendous growth in LNG development in the past two to three years, with final investment decisions made and construction underway for eight projects. However, this growth has taken its toll on labor and resources, resulting in cost escalations and project delays. As a result, greenfield LNG project proposals are losing steam, and planned expansions on greenfield projects will take time. Most LNG buyers will take a “wait and see” approach on greenfield projects, only taking them seriously when they’ve come through.

East Africa, where a number of LNG projects are proposed, has great potential, but the lack of basic industry infrastructure and high institutional uncertainty means LNG project development will take time, Mohanty said. With minimal or non-existent service sector, the region is less equipped to handle large LNG construction projects.

LNG project developers will face significant technical challenges along the supply chain – from upstream to the plant –  for Canadian LNG export projects, which will slow progress on these projects. Companies will face challenges in constructing pipelines to ship Western Canadian reserves to British Columbia, where eight projects have been proposed for construction on Canada’s west coast. 

Other challenges facing Canadian LNG projects include limited labor and resources – and competition with other countries for workers and resources – fiscal uncertainties, dealings with indigenous group First Nations, give the perception that Canadian LNG projects are moving at a slower pace. While Canadian LNG projects will move forward eventually, significant uncertainty remains on the timing of project start-up.

In Russia, the Yamal LNG project faces significant technical challenges associated with its location within the Arctic Circle. However, LNG exports from the project are expected to start up before the end of the decade.

Unlike other members of the Big Five, including Russia, most LNG buyers are interested in having exposure to U.S. LNG export terminals, which offer several advantages to projects in other countries. These advantages include lower deliverability risk, better access to labor and other resources, an extensive pipeline network and multiple supply sources.


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Dr. Tom Williams  |  February 27, 2014
US LNG is probably now well behind the curve as PRC/Korea/Japan are investing NOW in pipelines and fracking and like PRC did with HongKong Black Point Power plant - built 500mi subsea pipeline from and gas collector system for a 1000++MW power plant in HK...before the contracts could be signed to get the coal... Now PRC is getting the gas production going in west and central China...laying pipelines to Beijing and Shanghai...once in Beijing piping into Incheon is piece of cake...only question is a gas line from Incheon to Pusan by land/sea...then jump the straits to Japan...subsea again. One question - highly compressed NG or LNG by pipe PRC/Korea/Japan, I believe, have already gotten agreements regarding technologies, pipelayers, pipe production/transport, and sizing/number of pipelines...along with 25 year delivery contracts. These are easy and lucrative contracts for all three.. Russians are trying to come into the north end of Japan but their gas will probably much more expensive and not include the Koreans in the mix - kiss of death...in this commodity market system. US gas may provide a little LNG in 2016-18 until the pipelines are operating to Japan. So who would want to invest in a pipeline to NWUS/Can-BC which will be moot within 5-years, as no one in Japan would sign a 25-year supply contract for LNG and receiving gasifiers when they know the PRC gas will be there within five years. That take care of the Pacific market while Argentina is progressing for the SoAmerican market...and NoAfrica and Europe can deal with the European demands within ten years...With tankers and pipeline investments it is difficult to deal with a spot market when it is LNG vs CNG.