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Amid regulatory uncertainties stemming from the Biden administration's decision to suspend the issuance of key LNG export permits for new projects, US gas producers express confidence in the growth outlook for liquefied natural gas (LNG) demand, emphasizing plans to meet incremental demand from ongoing projects.
According to S&P Global Commodity Insights (GCI), despite potential impacts on proposed export terminals seeking offtakers, major existing LNG export projects and those under construction are expected to proceed without significant disruption. Jeremy Knop, EQT's chief financial officer, indicated during the company's fourth-quarter earnings call that the LNG build-out timeline remains largely unaffected until the end of 2026, with no immediate changes anticipated in the market dynamics. Antero Resources similarly expects minimal impact on LNG demand growth, emphasizing continuity in LNG feedgas demand projections despite uncertainties surrounding new export authorizations. According to data from S&P Global Commodity Insights, LNG feedgas demand is projected to nearly double by 2028, reaching close to 25 Bcf/d from approximately 13 Bcf/d in 2023. These growth forecasts primarily include projects that have already secured authorization from the Department of Energy and are poised to commence operations in the near term. Projects such as the Golden Pass LNG facility in Texas and Venture Global's Plaquemines LNG in Louisiana are expected to initiate commissioning work in 2024, with demand from these facilities anticipated to ramp up through 2025. Analysts anticipate a significant uptick in demand during this period, providing a promising launchpad for LNG producers. Despite prevailing uncertainties and regulatory challenges, US gas producers remain bullish on the future outlook, particularly with the startup of new export projects. Operators are exercising caution in their guidance for 2024, given current natural gas futures pricing and until new incremental feedgas becomes available. The Biden administration's permitting freeze, announced on January 26, has cast uncertainty over the role of the US as an LNG exporter, particularly affecting proposed projects awaiting permits. The duration of the freeze remains unclear, with expectations of lasting at least through the November presidential election. As a result, analysts have revised expectations for final investment decisions on new LNG projects, delaying anticipated expansions in the US and Mexico. Approximately 30 million mt/year of probable export capacity additions are at risk due to the permitting hold, impacting projects dependent on Department of Energy (DOE) approvals. US natural gas producers with long-term LNG export deals tied to projects affected by the freeze are navigating uncertainties surrounding permit extensions. EQT and Chesapeake are among the companies with agreements for LNG export capacity, facing challenges related to pending applications and permit deadlines. Despite the regulatory hurdles, US producers maintain a positive outlook on LNG growth, emphasizing resilience and adaptability in navigating evolving market dynamics and regulatory landscapes. (ANI)
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