Cheniere boasts of strength in a competitive LNG world
US LNG exporter Cheniere Energy in an analysis published April 9 found low-cost projects from other regions could outcompete those along the Gulf Coast, but stressed it was positioned for long-term strength.
“The global LNG market is highly competitive today and cost competitiveness will be an increasingly important factor in any future scenario,” the company said in its climate scenario analysis report. The report seeks to understand the implications for LNG supply and demand under the International Energy Agency's sustainable development scenario, which aligns with Paris agreement targets to limit global warming to 2°C.
In releasing its Q4 2020 financial results in February, the company said it shipped about 1,425 LNG cargoes totalling more than 95mn mt from its two liquefaction projects, Sabine Pass LNG in Louisiana and Corpus Christi Liquefaction in Texas.
Commissioning of Train 3 at Corpus Christi was completed as of March 26. But in the climate scenario report describing how LNG will play a role in the energy transition, the company noted that competition was stiff.
“A downside risk to US Gulf Coast projects is the introduction of low-cost supply from new regions, if stalled projects find a path to market or certain major gas resource holders are incentivised to increase supply capacity and accept lower returns to monetise upstream resources to avoid stranding natural gas assets,” the report read.
Last month, a handful of US lawmakers from the Republican Party penned legislation that would facilitate LNG exports. Sen. Ted Cruz, who represents Texas, said president Joe Biden’s clean-energy agenda left LNG by the wayside.
Nevertheless, Cheniere said it was positioned for long-term resilience.
"The conclusions of this analysis reinforce our belief that Cheniere’s business is built for longevity, and that LNG has a significant role to play in the global transition to a lower carbon future," CEO Jack Fusco said.