Surging LNG demand in Asia is driving a renewed interest in long-term supply contracts, which could be good news for pending projects in South Louisiana.
Energy Transfer President and General Counsel Tom Mason tells Reuters that a rise in prices “has translated into a pickup in traction with customers for long-term commitments for LNG purchases.”
As Reuters reports, natural gas futures in Europe and Asia have climbed to their highest levels in more than a year, driven by a sharp rise in demand late in 2020, especially out of China, where buyers have scrambled to secure supply. Asian nations have driven record growth in LNG as they seek to replace dirtier coal plants and fuel growing energy consumption. Even so, most industry analysts expect next year to be another difficult one.
Weak prices and concerns about oversupply have delayed LNG supply projects in South Louisiana and elsewhere along the Gulf Coast in recent years. Developers now report greater interest in long-term supply deals that would make new export plants economically feasible, according to Reuters.