Interview Synopsis

North American LNG outlook – export demand pressures amid coronavirus

  • Multi Asset
  • Energy
  • Global

The situation that has unfolded for the US LNG industry in 2020 has been exacerbated, but not entirely shaped by, the COVID-19 pandemic. Two mild winters and a ramp-up in export capacity amplified the impact of waning demand due to lockdowns, a C-level executive at LNG Allies told Third Bridge Forum. 

Positive 2021 outlook for US liquified natural gas (LNG) 

The Interview started with a focus on demand recovery. Since hitting the bottom in August, momentum has been building, the expert said, noting that there were “record deliveries” to export facilities at the start of December.   

Next on the agenda was the competitiveness of US LNG in light of crude oil price declines and the strengthening of US natural gas prices. “We’re finding that it’s very competitive,” he said, noting that the JKM index in Asia and Gas Trade Flows data in Europe are up, with US LNG “fully in the money in those markets”. However, some analysts foresee a “tightening situation” through 2021 and possibly into 2022. 

In terms of the key markets likely to become top export destinations, Asia is “critical”, with India, Bangladesh, Pakistan and Sri Lanka particularly important. There are also “great possibilities” across Vietnam, Thailand, the Philippines and Indonesia. China is, of course, a “big priority” too.

The specialist also noted that US LNG isn’t fighting for market share against renewables in many parts of Asia, but competing against coal. This is due to price sensitivity in the region. “If US LNG rises too high and you get beyond what is competitive with coal, that’s a problematic area,” he said.

Despite “lots of moving pieces” in Europe, the region is the second most important market for LNG Allies. “Europe has been a great destination for us. A lot of gas is flown [shipped] into all the importing terminals. The Iberian Peninsula with Spain and Portugal has been really crucial.”

Other topics explored in the Interview included expectations regarding the Biden administration’s stance on LNG, whether the industry is poised for disruptors or consolidation, and an overview of noteworthy players and projects.

To access all the human insights in Third Bridge Forum’s North American LNG outlook – export demand pressures amid coronavirus Interview, click here to view the full transcript. 

The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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