LNG export projects looking to take a positive final investment decision (FID) need to sell a high proportion of their nameplate capacity under long-term contracts to ensure sufficient cash flows to underpin the project and obtain financing. U.S.-based projects (new and expansions) totaling more than 350 million tons per annum (MMtpa, 48.3 Bcf/) — against a current global market of 400 MMtpa (52.9 Bcf/d) — are vying for creditworthy offtakers from multiple markets in their pre-FID deliberations. The sense of urgency among project sponsors has been boosted by the Russia/Ukraine war and a potentially resurgent Chinese economy, both of which should promise a bright future for new projects. Plenty of those have reached FID in the last couple of years, but what is holding others back from taking the same step? In today’s RBN blog, we’ll look at some of the factors impacting those decisions and the long-term implications that flow from them.
How Soon is Now? – Financing, Tariffs, Prices Complicate the Path to FID for LNG Export Projects
