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US LNG stumbling in face of trade war hurdles

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LNG Industry,

Reuters is reporting that the delay of the Magnolia LNG project is strengthening fears that the US-China trade war poses a serious threat to the next wave of US LNG projects.

The US is in prime position to dominate LNG supply to Asia, as many nations on the continent begin to move away from high-emission fuel sources, such as coal, in favour of cleaner fuels such as LNG. However, trade hurdles, in particular China’s 10% tariff on US LNG imports, have real potential to impede the US’ ability to capitalise on this opportunity. Experts have pointed to the delay of LNG Limited’s new, Magnolia LNG, terminal as one of the first signs of the tangible impact these hurdles can have.

If new US LNG export projects, such as Magnolia LNG, cannot secure supply contracts with China (one of the fastest growing LNG markets with a seemingly ever-increasing demand), then it is going to be very challenging for them to get off the ground; in light of intense competition at home and abroad.

Industry analysts and bankers were already beginning to question whether the next wave of US LNG projects would be able to secure sufficient investment. This turn of events would seem to validate these concerns.

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