North America will lead the next wave of global LNG project sanctions in 2019, with three US Gulf Coast developments – Sabine Pass Train 6, Golden Pass and Calcasieu Pass – expected to reach final investment decision (FID) in the first half of 2019, says Wood Mackenzie’s latest quarterly North America LNG projects update.
Alex Munton, principal analyst, Americas LNG has this to say: “With FID imminent on three US Gulf Coast LNG projects, North America is set to lead an expected record year for LNG project sanctions. With at least two other Gulf Coast projects – Freeport Train 4 and possibly Driftwood LNG – also not far behind, the first half of 2019 will be an especially busy one for the US.”
The North American LNG market has had difficulties in terms of investment prior to 2018 but now seems to be coming back to life with Cheniere Marketing (CMI), Venture Global, Sempra, Tellurian, Freeport and Woodfibre announcing their long-term agreements with offtakers towards the last quarter of 2018. It was also reported that 13 million tonnes per annum (mmtpa) in sales were announced, totalling more than 20 mmtpa for the year within the same period.
Mr. Munton had this to say: “2018 was a stellar year for sales of North America LNG, and US LNG in particular. Renewed confidence in the outlook for LNG, combined with the choice, flexibility and competitiveness the US market offers facilitated this surge in interest.”
Wood’s update also reported that the construction and expansion of the three Gulf Coast LNG facilities, totalling up to 30 mmtpa of capacity, would inject billions of dollars of investment in the region, anticipating that a total of US$20 billion could be invested in the three projects over the next four years.
“While the Gulf Coast remains the key growth region for North America LNG, projects in Canada and Mexico are also progressing and attracting interest,” Mr. Munton said. “Additional west Canadian capacity could help further open Canadian supply to global markets, and we are now seeing momentum around Mexico as an alternative export route for US production.”
Woods also said that Canada’s Woodfibre LNG could reach FID in 2019, contingent though on the execution of an engineering, procurement and construction (EPC) contract. Adding that Mexico’s Costa Azul Phase 1 LNG export terminal still needs to finalize an EPC contract, binding offtake agreements, permitting and financing arrangements. However, progress is being made and it too could reach FID in 2019.