August 8, 2017 / 7:52 PM / 3 months ago

LNG Ltd says 'well placed' for next wave of U.S. LNG exports

(Reuters) - Liquefied Natural Gas Ltd’s (LNG.AX) U.S. and Canadian projects are “well placed” to meet the next wave of LNG exports that will be needed in the early 2020s, the chief executive of the Australian developer of LNG export terminals said on Tuesday.

LNG Ltd has two fully developed export projects - Magnolia in Louisiana and Bear Head in Nova Scotia. Each will cost about $5 billion, not including financing costs, and have the capacity to export 8 million tonnes per annum (mtpa) of LNG.

“We are focused on selling offtake and that is a difficult market right now because people don’t feel the need to sign long-term deals,” Greg Vesey, chief executive of LNG Ltd, told Reuters in an interview.

In 2016, global LNG prices TRGBNBPD1 LNG-AS fell to their lowest levels since at least 2011, according to Reuters data, as new U.S. and Australian export terminals boosted supplies over demand.

Vesey said LNG prices would likely remain soft for another few years as more export terminals enter service.

In the United States, five export facilities will join Cheniere Energy Inc’s (LNG.A) Sabine Pass LNG export project in Louisiana by 2019, making the country the third biggest LNG exporter in the world behind Qatar and Australia.

“The urgency for customers to sign deals for new LNG capacity will happen in the next 18 months because we think LNG demand will start to exceed supply again in 2022 to 2023,” Vesey said, noting that customers will have to lock in supplies now in order for new projects to get built in five years.

He said the company would likely finish selling remaining capacity at the Magnolia project by the end of 2018, which would put the plant’s first liquefaction train on track to enter service around the 2022-2023 timeframe.

LNG Ltd, which is considering a U.S. stock market listing, has already sold 2 mtpa of capacity to Meridian LNG to supply a proposed import project in the UK.

Vesey said he believes Magnolia has an advantage over other companies looking to build new U.S. LNG export terminals because it is already fully permitted and smaller than other projects.

Both Magnolia and Bear Head are designed to have four 2-mtpa liquefaction trains.

Other new U.S. LNG export projects looking for customers include Tellurian Inc’s (TELL.O) proposed 26.3-mtpa Driftwood in Louisiana, Venture Global’s 10-mtpa Calcasieu Pass and 20-mtpa Plaquemines Parish in Louisiana, and NextDecade Corp’s (NEXT.O) 27-mtpa Rio Grande in Texas.

Reporting by Scott DiSavino; Editing by Leslie Adler

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