LNG industry on the verge of a major breakout in Louisiana
With more than $88 billion in LNG projects planned, under construction or in operation, the state is poised to become the center of the LNG universe, Business Report details in a new feature in the current issue.
Regardless of short-term market variables, Jason French, chairman of the Louisiana Energy Exports Association, says satisfying long-term demand requires “a major LNG facility to be built somewhere in the world every year between now and 2035.”
The World Trade Center of New Orleans and several leading LNG companies launched LEEA in February to promote industry growth and lobby for pro-LNG public policies.
“The global LNG market is undergoing a shift, reacting to the fact that the U.S. has become a significant exporter of LNG,” French says. “By the end of the decade the U.S. will be one of the top three LNG producers in the world, and the bulk of that LNG is coming from Louisiana.”
The current downturn aside, he says the industry consensus is demand will spike within the next six years.
The optimism is fueled by significant worldwide demand, especially from U.S. allies in Europe and Asia who want a safe, stable and secure source of energy that also lessens their dependence on Russia.
“Folks in India and China know where Lake Charles is because a number of these projects are centered in the southwest Louisiana region,” French notes.
Those representing the industry may gush with unbridled optimism, yet there’s no denying increased risk—short-term or not—has led to the cancellation of several previously-announced projects.
“Some companies are standing down their investments based on short-term reactions to what’s happened in the market,” French says. “Those still pursuing investments are going to be well positioned to meet the real run on LNG in the 2022, 2023 timeframe.”
Count Baton Rouge among the places where LNG aspirations have sputtered in recent months. The region’s distance from the Gulf of Mexico precludes it from attracting the the kind of billion-dollar export facilities that the Lake Charles area is attracting.
The one bright spot is the late 2016 groundbreaking of a NuBlu Energy facility in Port Allen. The plant—supplying LNG for regional commercial, rail, marine and industrial applications—will have an initial startup capacity of 30,000 gallons per day, ramping up to a 90,000 gallon daily capacity once it’s fully operational later this year.