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2 US LNG terminals advance work as yet-to-be-sanctioned projects struggle


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2 US LNG terminals advance work as yet-to-be-sanctioned projects struggle

Developers of the two U.S. LNG export terminals under construction said Nov. 10 that the projects remain on target to start up on time, despite global market volatility, an unusually active hurricane season and ongoing impacts from the coronavirus pandemic.

The updates from Golden Pass LNG in Texas, backed by Qatar Petroleum and Exxon Mobil Corp., and Venture Global LNG's Calcasieu Pass in Louisiana come as developers of projects on the Gulf, Atlantic and Pacific coasts that have yet to be sanctioned continue to struggle to build commercial support.

The 10-million-tonnes-per-year Calcasieu Pass and up to 18-Mt/year Golden Pass facilities are part of the second wave of U.S. liquefaction capacity, slated to begin service by the middle of the decade. Another dozen or so projects that are actively being developed have yet to receive final investment decisions. Many of the developers have delayed those decisions.

Golden Pass has been on a "full sprint" since beginning construction in 2019, Golden Pass LNG Terminal Chief Commercial Officer Jeff Hammad said during an LDC Gas Forums event in San Antonio that was webcast.

"You're going to start seeing a lot more steel and concrete," Hammad said. "And in spite of the collapse of the global energy market, a pandemic, and two hurricanes, we remain on track to have Train 1 operational in 2024."

At Calcasieu Pass, Venture Global recently received the first two of 18 prefabricated modular liquefaction trains and mixed refrigerant compressor skids from a Baker Hughes Co. factory in Italy, according to a company statement.

Both units have already been positioned onto their foundations. Next, they will be connected to their respective heat exchangers, or cold boxes. Calcasieu Pass is scheduled to begin service in 2022.

As the coronavirus pandemic upended gas markets, many developers of new projects were forced to push back their targets for making final investment decisions until 2021 or later.

Analysts see lower-cost expansions of existing LNG export facilities as likelier to advance than new terminals.

Even on the Gulf Coast, where most of the U.S. LNG export infrastructure is concentrated, project developers face greater risk than they used to, analysts say.

Recently some developers have expressed greater optimism about an improved environment for negotiating supply deals amid a strong rebound in natural gas demand.

Feedgas deliveries to the six U.S. LNG export terminals in operation have soared to more than 10 Bcf/d from the summer doldrums, when cargo cancellations were widespread.

The ramp-up of U.S. LNG exports is expected to continue in the coming months. But significant uncertainty remains about the export dynamics after the peak winter heating season, and rising coronavirus infection rates threaten to hamper commercial and industrial demand.

"Growth into 2021 will continue, but it's tied to COVID. The recent lockdown in Europe, etc., could impact the forecast for 2021 and beyond," BP Energy Co. Inc. President and CEO Orlando Alvarez said at the LDC conference. "Until we get through COVID, there is still that range of uncertainty that we still need to really watch and consider and respect."

Harry Weber is a reporter with S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.