(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor – President Joe Biden announced an agreement in late March committing the US LNG industry to supply an additional 15 billion cubic tons (bct) of LNG to Europe through the remainder of 2022 with an expectation of increasing that to 50 bct through 2030. According to the article in the New York Times, industry executives applaud the measure but are unclear regarding how this will be done. US LNG export facilities are nearly at capacity and while more projects are approved, most final investment decisions have not been made. Since the Russian invasion of Ukraine, however, one of the fourteen approved, but not yet built, US LNG export facilities have moved closer to construction. Sempra Energy and New Fortress Energy Inc advanced agreements on separate projects, one of which could be producing LNG within 12 months. Growing demand among European customers was behind New Fortress Energy’s decision to invest its own money to build a 2.8 million tonne per annum (MTPA) plant off the coast of Louisiana. In addition to Fortress’s US facility, Sempra Energy, which is currently building the Costa Azul LNG terminal in Baja California, Mexico, reached a preliminary agreement to supply France’s TotalEnergies with gas from a second Mexican project, Vista Pacifico LNG. According to a Bloomberg article, on April 14, The U.S. Export-Import Bank approved a plan Thursday that could yield a flood of financing for US energy ventures, including wind and solar projects, battery manufacturing and terminals to sell LNG overseas. The bank’s formal policy shift, encouraged by the Biden administration, would extend support to domestic manufacturing and infrastructure projects that facilitate exports. Under the program, the bank will provide support across the entire lifecycle of a project, from capital investment to financing meant to secure foreign sales. LNG allies argue that Export-Import Bank financing could help developers seeking to sell their product to countries with fast-growing energy demand but no bankable credit rating. Import Supply – The February import total was 68,352 tons which was just over 20,000 tons more than the license tally from last month. March import licenses show a further increase in volume to 99,877 tons. The April forecast, with 12 of 21 days summed, is back down to 73,677 tons. The top import item for the month of February 2022 was Carbon ERW, over 4 ½” OD not over 16” OD, at 26,663 tons. The price was $1,451/ton. After just two months in 2022 the average price is $1,454/ton.
Preston Pipe Report – April 2022
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