LNG in World Markets Featured Article

In a Jan. 26 decision, the Biden administration announced a pause on permits that allow LNG exports to non-free trade agreement (non-FTA) nations. However, the pause only applies to non-FTA permits issued by the US Department of Energy (DOE). The agency later clarified that the pause specifically applies to new applications and those already under consideration (see LNGWM Mid-Month, Feb ’24). Extension requests for non-FTA permits will be considered under an April 2023 policy that states that a project must be under construction and facing extenuating circumstances to receive more time to send out its first cargo.

However, the FERC and its permits are not subject to the Biden administration pause. Showing some independence from the DOE, the FERC granted Tellurian’s proposed 27-MMt/y Driftwood LNG export project in Louisiana another three years to place the plant into service. During a Feb. 15 public meeting, the FERC gave Tellurian an extension until April 18, 2029 – giving the developer additional time to secure supply deals, a non-FTA permit extension and financing (see LNGWM, Feb ’24). Tellurian announced on Feb. 6 that the company is seeking to sell its 0.2-Bcf/d upstream natural gas leases in the Haynesville shale of Louisiana. Proceeds from the sale will be used to reduce the company’s debt and potentially provide equity to develop the Driftwood project. It remains to be seen if Tellurian will wait until after the US presidential election to seek a non-FTA permit extension.

UAE, Mozambique and PNG are 2024 FID frontrunners

Aside from Rio Grande LNG, the frontrunners for 2024 FID are outside the US and appear to be ADNOC’s 9.6-MMt/y Ruwais LNG project in Abu Dhabi, the Eni-led 3.4-MMt/y Coral Norte FLNG project in Mozambique, and the TotalEnergies-led 6-MMt/y Papua LNG project in Papua New Guinea. Both Coral Norte FLNG and Papua LNG are currently seeking funding from commercial banks and export credit agencies. Abu Dhabi’s Ruwais LNG project, which is less reliant on debt financing than many of its fellow project developers, and of the handful of projects targeting FID this year, appears to be in pole position (see below).

If these three projects, along with Rio Grande Train 4, get sanctioned, the volume of supply for projects reaching FIDs in 2024 will be 24.4 MMt/y – which is a lot lower than 2023’s 38 MMt/y. Furthermore, Papua LNG faces challenges on several fronts. It was originally aiming to take FID during the first half of this year, but the timeline has been pushed back to year-end and it could face further delays.

It is unclear if QatarEnergy’s announcement – that it plans to add another 16 MMt/y across two trains to raise its capacity to 142 MMt/y by 2030 from 126 MMt/y – will ultimately count as a 2024 FID. The company has yet to secure an engineering, procurement and construction (EPC) contractor. Adding Qatar’s expansion to the total would bring planned 2024 FIDs to 40.4 MMt/y, which is above 2023’s level. If, with the absence of some US competitors due to the permit pause, NextDecade decides to give Train 5 the green light it would add another 5.4 MMt/y. This would put 2024 FIDs at 45.8 MMt/y – third behind 2019 and 2021 (see Chart).

Outsiders for 2024 FID It is possible that a Canada project could join the 2024 FIDs. With US projects hampered by the approval pause, Canadian projects which bypass the bottlenecked Panama Canal are seeing more interest from Asian customers. Cedar LNG’s 3.1-MMt/y floating liquefaction project, is targeting a mid-2024 FID, and may get the green light this year. However, it will need to sign up customers and is in talks with a Chinese LNG buyer and another tolling customer. Compatriot Ksi Lisims LNG, which is a 12-MMt/y export project sponsored by Canada’s indigenous Nisga’a Nation, Rockies LNG and Western LNG, has an outside chance of a 2024 FID. It announced its first sales and purchase agreement (SPA), which is a 2-MMt/y deal with Shell, but it still needs to sell 9 MMt/y.