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Creating LNG supply flexibility: drivers of US LNG output

Creating LNG supply flexibility: drivers of US LNG output

Report summary

The new US LNG supply is adding flexibility to global LNG markets.  With oversupply looming in the near term, destination and lifting flexibility US LNG allows ensure its viability in an increasing competitive market.

Ample low-cost supplies continue to be developed at lower costs and this keeps Henry Hub lower for even longer.  The near term development of associated gas plays like the Permian defers the development of current marginal supply sources whose breakeven are around $3/mmbtu. This implies even when production from plays like Permian plateaus in 2025, the cost of new gas developments remains relatively low

Looking forward, there are many proposed, pre-FID LNG projects in the US. Currently, many buyers are weary of signing new long term, foundation-sized contracts to back the development of these projects. To incentivize buyers, these "second wave" projects need to offer alternative commercial terms on top of the flexibility the current US supplies have.

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  • Creating LNG supply flexibility: drivers of US LNG output PDF - 236.35 KB 2 Pages, 0 Tables, 0 Figures
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Description

This LNG Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

If you want to look at the trends, risks and implications of this topic, this report gives you an alternative point of view to help inform your decision making.

Offering bottom-up market analysis for over 150 LNG supply assets, 28 LNG-importing countries and more than 500 LNG contracts, Wood Mackenzie is the definitive and trusted resource for the LNG industry.

We use our robust database and expert industry knowledge to help you understand the dynamics of the global LNG industry and identify emerging trends and opportunities.

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