Go West, Part 2 - Mexico's Pacific Coast LNG Export Projects Gain Traction

RBN Energy Blogcast

For years, industry experts warned that the global LNG market was entering a period of extreme oversupply that would last until mid-decade. And up until late last year, that bearish scenario seemed to be materializing. Global gas prices had fallen as more LNG export capacity came online, and then COVID-19 decimated global markets and caused existing LNG terminals to shut-in production. But just as quickly as it collapsed, the market flipped. The world is now left scrambling to secure LNG/gas supply ahead of the heating season and global gas prices have hit record highs in recent weeks, signaling a turbulent winter ahead. Suffice it to say, utilities and governments have energy security and reliability on the mind, not just for prompt winter but for the longer term, and that pressure is unlikely to let up anytime soon. That’s brought previously commitment-wary LNG offtakers back to the negotiation table for new LNG export developments — cautiously and with a sharpened focus on de-risking long-term commitments amid heightened uncertainty. One way to do just that is to capitalize on the economic advantages of North America’s Pacific Coast projects. In today’s RBN blog, we continue our series looking at the state of LNG development on the North American Pacific Coast.