Dicey Long-term Natural Gas Outlook Stifles LNG Investment

Uncertainty hovers over long-term natural gas demand forecasts, particularly in Europe, says Bechtel executive.

Uncertainty over long-term demand forecasts is hindering investment in LNG assets. (Source: Mark Anthony Ray/Shutterstock.com)

Uncertainty over long-term demand forecasts is hindering investment in LNG assets. (Source: Mark Anthony Ray/Shutterstock.com)

The talk around easing regulations to build LNG facilities is a welcome change but nowhere near enough, shipping and markets experts said during an April 21 webinar. That’s because how big projects are financed has also changed, and not necessarily for the better.

“A lot of the players are these small companies,” said Cara Striegold, risk manager at LNG terminal builder Bechtel Corp., during the Commodities People webinar. “They don’t have the Shell, the Exxon money. We see a lot of venture capital firms building these LNG terminals and that leads companies like ours to really be heavily involved with the banks, with the financing, putting together these deals. So, it’s been a very different market than what we saw, maybe 10 years ago, where it was the major corporations.”

That lack of a massive financial comfort level from the banks, as well as an arduous regulatory process, has scared a lot of people out of the market, Striegold said. 

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Joseph Markman

Joseph Markman, senior editor for Hart Energy, covers markets and provides data analysis for all Hart Energy editorial products.