Oil & Gas

04 Feb 2024

FACTBOX European and Asian Companies Affected by US Pause on LNG Export Permits

04 Feb 2024  by reuters   

Model of LNG tanker is seen in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration Acquire Licensing Rights
U.S. President Joe Biden's administration announced a pause on pending and future permits to export liquefied natural gas (LNG) to non-Free Trade Agreement countries until the Department of Energy finishes a new review of climate impacts.

In 2023, roughly 67% of U.S. LNG exports went to Europe and 26% went to Asia, LSEG data showed.

ANAYSIS-US LNG export pause leaves EU, industry at odds over energy security.

Below are contracts signed with projects potentially impacted by the pause.

Venture Global LNG's Calcasieu Pass 2 plant

The project is part of a proposed 20 mtpa expansion of its existing Louisiana facility. It is awaiting U.S. Federal Energy Regulatory Commission (FERC) approval to begin construction. It signed the following eight 20-year contracts, starting in 2026:

- In the United States: New Fortress Energy (NFE.O), opens new tab, Exxon Mobil (XOM.N), opens new tab and Chevron (CVX.N), opens new tab have each signed a contract for 1 million metric tons per year (mtpa).

- In Germany: Utility EnBW signed a contract for 0.75 mtpa, whereas SEFE signed a contract for 2.25 mtpa.

SEFE said the moratorium put in place unilaterally by the U.S. government affects it as a company and the stability and security of supply of the European energy markets in general.

- In Japan: Inpex Corp (1605.T), opens new tab, the country's biggest oil and gas explorer, signed a 20-year contract for 1 mtpa, while the country's top LNG buyer, JERA, signed a 20-year contract for similar volumes.

Inpex Corp said it is reviewing the situation closely, while JERA said the pause could affect Japan's fuel security, and even the world's.

- In China: China Gas Holdings (0384.HK), opens new tab in 2023 signed a 20-year contract for 1 mtpa.

Energy Transfer's Lake Charles LNG project

Energy Transfer (ET.N), opens new tab re-applied for an export permit for its Lake Charles LNG facility in Louisiana after its original permit expired without completing construction. It sought a new non-FTA license in August 2023.

Energy Transfer has signed the following 6 contracts:

-In China: China Gas Holdings signed a 25-year contract for 0.7 mtpa starting 2026.

ENN Natural Gas (600803.SS), opens new tab signed a 20-year contract for 1.8 mtpa starting 2026, while its subsidiary ENN Energy signed a 20-year contract for 0.9 mtpa starting 2026.

-In South Korea: SK Gas (018670.KS), opens new tab signed a contract in 2022 for 0.4 mtpa for 18 years starting from 2026.

-In Switzerland: Commodity trader Gunvor Group (GGL.UL) signed in 2022 a 20-year contract for 2 mtpa starting from 2026.

-In Britain: In 2022, Shell (SHEL.L), opens new tab signed a 20-year contract for 2.1 mtpa starting 2026.

Delfin LNG

Delfin Midstream Inc's project, Delfin LNG Deepwater Port, will support up to four floating LNG vessels with a combined export capacity of about 13.3 mtpa.

The company signed the below three contracts:

In Switzerland: Commodities trader Vitol (VITOLV.UL) signed in 2022 a 15-year contract for 0.5 mtpa starting in 2026.

In Britain: Centrica (CNA.L), opens new tab signed in 2023 a 15-year contract for 1 mtpa starting 2027.

Hartree Patners Power and Gas company signed in 2023 a 20-year contract for 0.6 mtpa.

Commonwealth LNG

Commonwealth LNG has been waiting since November 2022 for approval for its 9.3 mtpa LNG export facility in Cameron, Louisiana. The firm has reached agreements for just about 50% of capacity and was targeting a final investment decision this year.

It has signed only one contract with Woodside Energy (WDS.AX), opens new tab for up to 2.5 mtpa over 20 years starting 2026.

Saguaro Energia LNG

Analysts said the pause could also impact LNG projects in Mexico as they plan to use U.S. feedgas.

Mexico Pacific's 14.1 mtpa planned LNG export facility, Saguaro Energia on Mexico's west coast, targets the start of commercial operations in 2026. It has signed the below contracts:

- In China: Guangzhou Development Group (600098.SS), opens new tab signed a deal to buy 2 mtpa of LNG for 20 years.

Zhejiang Energy also inked an agreement to buy 1 mtpa over a 20 year period.

- In Australia: Woodside Energy agreed to buy 1.3 mtpa of LNG for 20 years.

- In the United States: Exxon Mobil inked two deals with Mexico Pacific. The first was a 20-year term to buy about 2 mtpa from the project's first two trains, with an option for 1 mtpa from train 3. The second deal was for an additional 1.2 mtpa over a 20-year period.

ConocoPhillips (COP.N), opens new tab signed 20-year deal to receive a collective 2.2 mtpa of LNG.

- In Britain:

Shell signed a deal to offtake 2.6 mtpa from the project's first two trains for 20 years and later agreed to buy an additional 1.1 mtpa from the third train for 20 years.


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