Completed!

The energy crisis triggered a record increase in the number of projects for the export of LNG from the United States. There are now more than 36 million tons of contracts signed a year, giving America’s export capacity a huge boost. The volume of investments in 2023 in new infrastructure projects is growing at a record pace, which is the highest figure for the entire period of observation and accounting. But the window of opportunity for more projects may close soon. Bloomberg senior reporter Steven Stapzinski writes about this.

The record wave of US liquefied natural gas investment could dry up soon. The boom and excitement of signing contracts, on the basis of the total contracted volumes of which infrastructure is being built, is simply unattainable in reality. Plants with a capacity of more than 36 million tons per year were approved this year, the sole purpose of which is to serve export needs, the highest for the country, according to Bloomberg estimates. The latest project is the NextDecade Corp object. in Texas, worth $18.4 billion, was agreed earlier this week.

While Europe is rushing to replace Russian pipeline gas with super-cooled fuels, it is also simultaneously scrambling to limit the use of fossil fuels by 2030 amid more ambitious environmental targets. Qatar is also on the alert to sell the LNG that will flow as a result of the massive expansion of gas production, which puts it in direct competition with some of the proposed US plants.

In other words, long-term contracts, as well as the plants designed to ensure their fulfillment, will in the very near future be called into question or even on the verge of closing, downtime, and unprofitability. Many experts warn about this.

There is a crowded field of American applicants. Of the 11 projects that have not yet been completed, Bloomberg analysts call seven that are likely not to be implemented, and the rest are “dark horses” because they have problems with contracts, funding and regulation. All the best projects have already been approved and almost completed, and there are only a few of them.

LNG plants take years to build. If the project doesn’t get funding and start construction in the next year or so, it could start production much later this decade or early next. However, then the competition will be fiercer, as other enterprises will be launched in America, Qatar and other countries. And this is without taking into account the environmental agenda, which is expanding from year to year. In this aspect, everything that is concluded for a period of more than 20 years, whether it is LNG supplies or a gas processing plant, is essentially an empty contract, a paper of intent, nothing more.

2023-07-15 04:38:36
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