LNG Ltd to decide on Magnolia export plant in H2
Liquefied Natural Gas Ltd expects to make a final investment decision on it's Magnolia LNG export plant in Louisiana during the second half of 2019, the chief executive of the Australia-listed developer said.
LNG Ltd had hoped to make a final investment decision on building the proposed $4.4 billion plant in late 2018, but the trade dispute with China and current low LNG prices were making it difficult for LNG developers to sign long-term deals with customers.
“The trade war put a general malaise on the industry for signing new deals. That, coupled with historically low prices, and people don’t feel much urgency to sign long-term deals,” Greg Vesey, chief executive of LNG Ltd, told Reuters at the BloombergNEF Summit in New York.
The project is one of a dozen U.S. LNG export terminals under development that expect to make a final investment decision in 2019, which would greatly expand U.S. LNG export capability.
The United States and China started imposing tariffs on each other’s goods in July 2018. As the dispute heated up, China, the world’s fastest-growing importer of the super-cooled fuel, in September imposed a 10 percent tariff on LNG from the United States, the world’s fastest-growing LNG exporter.
“When the trade dispute is settled it will send a message to the world that LNG deals can start getting signed again,” Vesey said, noting the company “forged a lot of good relationships in China and I expect some successes there.”
LNG prices in Europe and Asia LNG-AS have been declining for months and are now trading at their lowest levels in years.
LNG demand is expected to outstrip production around 2023. That is when Magnolia, designed to produce 8.8 million tonnes per annum (MTPA), could start producing LNG if the company starts building it in late 2019.
The projects in development would produce about 146 MTPA of LNG. Current U.S. LNG export capacity is 39 MTPA, and new terminals under construction would produce 44 MTPA.
Reporting by Scott DiSavino Editing by Marguerita Choy
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