War’s Scrambling of Gas Markets May Prompt Investors to Return to Energy

Europe’s rejection of Russian natural gas could translate into a boom in infrastructure to meet demand.

Höegh LNG’s Independence, left, a floating storage and regasification unit (FSRU) operating in Klaipeda, Lithuania, connects to the company’s Arctic Princess LNG carrier. As European countries cut off imports of pipelined Russian gas in response to that country’s invasion of Ukraine, shipments of LNG have increased and FSRUs have been relied on to compensate for a shortage of LNG import facilities on the continent. (Source: Höegh LNG)

Höegh LNG’s Independence, left, a floating storage and regasification unit (FSRU) operating in Klaipeda, Lithuania, connects to the company’s Arctic Princess LNG carrier. As European countries cut off imports of pipelined Russian gas in response to that country’s invasion of Ukraine, shipments of LNG have increased and FSRUs have been relied on to compensate for a shortage of LNG import facilities on the continent. (Source: Höegh LNG)

Russia’s invasion of Ukraine and the subsequent tightness in the global natural gas market have opened a window of opportunity for LNG export terminal developers looking to make a final investment decision (FID), according to investment banking advisory firm Evercore ISI.

For energy exporters, the environment for obtaining construction approvals and bank financing to build a new export facility is much more positive than it was just 12 months ago, said Evercore’s Sean Morgan during a recent webinar.

Morgan said he looks to Cheniere Energy Inc., pioneer of Gulf Coast LNG liquefaction and export terminals, as the bellwether for the U.S. response to Europe’s pivot away from Russian-supplied gas.

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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.