Wood Mackenzie's latest quarterly North America LNG projects update forecasts that North America will lead the next wave of global LNG project sanctions in 2019.
Three US Gulf Coast developments – Sabine Pass Train 6, Golden Pass and Calcasieu Pass – are expected to reach final investment decision (FID) in 1H19.
Alex Munton, Principal Analyst, Americas LNG, at Wood Mackenzie, said: "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."
After a lull in investment prior to 2018, the North America LNG market has sprung back to life. Since September, Cheniere Marketing (CMI), Venture Global, Sempra, Tellurian, Freeport and Woodfibre all announced long-term agreements with offtakers. In the same period, 13 million tpy in sales were announced, totalling more than 20 million tpy for the year.
"2018 was a stellar year for sales of North America LNG, and US LNG in particular," Mr Munton said. "Renewed confidence in the outlook for LNG, combined with the choice, flexibility and competitiveness the US market offers facilitated this surge in interest."
The construction and expansion of the three Gulf Coast LNG facilities, totalling up to 30 million tpy of capacity, will also inject billions of dollars of investment in the region. According to Wood Mackenzie, 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."
According to Wood Mackenzie’s analysis, Canada's Woodfibre LNG could reach FID in 2019, contingent on the execution of an engineering, procurement and construction (EPC) contract. Mexico's Costa Azul Phase 1 LNG export terminal still needs to finalise an EPC contract, binding offtake agreements, permitting and financing arrangements. However, progress is being made and it too could reach FID in 2019.
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