US LNG Price Economic Drivers in the Context of Low LNG and Tariffs

M&A LNG Theme Back in the Spotlight with Total’s Entry in Mozambique LNG

More Progress on LNG Projects: We Retain Our View of Much Higher than Consensus FIDs

Global energy equity and oil & gas macro analyst

Anish Kapadia

Akap Energy

Thematic (Sector/Industry)

Zimbabwe Energy / Thematic (Sector/Industry)

<p>We have been discussing our more bullish outlook for LNG project sanctions than market consensus for a while and remain very confident that the market will be surprised to the upside. We have also seen new projects emerge such as Novatek's Ob LNG that could take FID early in 2020 and Argentina looking at a large scale LNG export plant. There have been 3 projects sanctioned in 2019, totalling 34mmtpa of capacity and 2 further projects that are imminently likely to take FID, with another 30mmtpa of capacity. Consultant Wood Mackenzie, which is widely used by the industry, has taken its expectations of project sanctions up to around 80mmtpa from &gt;60mmpta it forecast at the beginning of this year. We still see upside and expect &gt;100mmpta to be sanctioned this year with 20 projects in the queue. We continue to think this will be a bumper year for the LNG engineering and service companies but is a negative longer term for the LNG developers.  This should be positive for the LNG contractors such as <a href="https://www.smartkarma.com/entities/17524" target="_blank" rel="noopener" data-smartkarma-citation="entities:17524:1">Mcdermott Intl (MDR US)</a>, <a href="https://www.smartkarma.com/entities/27505" target="_blank" rel="noopener" data-smartkarma-citation="entities:27505:1">TechnipFMC PLC (FTI FP)</a>, <a href="https://www.smartkarma.com/entities/6232" target="_blank" rel="noopener" data-smartkarma-citation="entities:6232:1">Chiyoda Corp (6366 JP)</a> and <a href="https://www.smartkarma.com/entities/19335" target="_blank" rel="noopener" data-smartkarma-citation="entities:19335:1">Jgc Corp (1963 JP)</a> .</p>

We have been discussing our more bullish outlook for LNG project sanctions than market consensus for a while and remain very confident that the market will be surprised to the upside. We have also seen new projects emerge such as Novatek's Ob LNG that could take FID early in 2020 and Argentina looking at a large scale LNG export plant. There have been 3 projects sanctioned in 2019, totalling 34mmtpa of capacity and 2 further projects that are imminently likely to take FID, with another 30mmtpa of capacity. Consultant Wood Mackenzie, which is widely used by the industry, has taken its expectations of project sanctions up to around 80mmtpa from &gt;60mmpta it forecast at the beginning of this year. We still see upside and expect &gt;100mmpta to be sanctioned this year with 20 projects in the queue. We continue to think this will be a bumper year for the LNG engineering and service companies but is a negative longer term for the LNG developers.  This should be positive for the LNG contractors such as Mcdermott Intl (MDR US), TechnipFMC PLC (FTI FP), Chiyoda Corp (6366 JP) and Jgc Corp (1963 JP) .

New LNG Projects: On-Track for a Bumper Year of Positive LNG Final Investment Decisions