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Wood Mackenzie releases report on North American LNG projects

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LNG Industry,

Wood Mackenzie has released its latest quarterly North America LNG projects update.

According to the update, North America will lead the next wave of global LNG project sanctions in 2019, with three US Gulf Coast developments – Sabine Pass Train 6, Golden Pass and Calcasieu Pass – expected to make a 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.”

In the report, Wood Mackenzie claims that the North American LNG market has found a new lease of life after a lull in investment prior to 2018. Since September this year, Cheniere Marketing (CMI), Venture Global, Sempra, Tellurian, Freeport and Woodfibre have all announced long-term agreements with offtakers. In the same period, 13 million tpy in sales have been announced, with a total of over 20 million tpy for the year.

Munton added: “2018 was a stellar year for sales of North America LNG, and US LNG in particular.

“Renewed confidence in the outlook for LNG, combined with the choice, flexibility and competitiveness the US market offers facilitated this surge in interest.”

Wood Mackenzie claims that the construction and expansion of three LNG facilities on the Gulf Coast, which will total up to 30 million tpy of capacity, will also see billions of dollars invested into the region. Wood Mackenzie adds that US$20 billion could be invested in the three projects over the coming four years.

Munton said: “While the Gulf Coast remains the key growth region for North America LNG, projects in Canada and Mexico are also progressing and attracting interest.

“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.”

Wood Mackenzie also claims that the Woodfibre LNG project in Canada could reach FID in 2019, depending on the finalisation of an engineering, procurement and construction (EPC) contract. The Costa Azul Phase 1 export terminal in Mexico still needs to finalise an EPC contract, binding offtake agreements, permitting and financing agreements. However, Wood Mackenzie claims that progress is being made, and FID could be reached in 2019.

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