As LNG Prices Surge, North American Project Development Languishes

Spending on new LNG projects in the U.S. halted in 2020, as low prices from coronavirus-induced demand destruction caused buyers to back away from signing long-term supply contracts.

Scott DiSavino, Reuters

Demand for LNG has never been higher, but developers in North America are headed into the final weeks of the year without having approved one new project yet.

Global natural gas prices are near record highs, as utilities in Europe and Asia compete for whatever LNG cargoes they can get before winter. LNG demand worldwide has increased every year since 2012 and soared by 40% in the last five as utilities substitute gas for dirtier-burning coal, but supply has not kept up with demand—and won't for several years.

The market’s growth spurred rapid development of liquefaction terminals in big exporters including the U.S., slated to become the largest LNG producer by capacity next year.

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