LNG industry prioritises rapid deployment amid elevated prices

Elevated liquefied natural gas prices are compelling market participants to prioritise rapid access to supplies. Industry leaders are focusing on strategies that accelerate cargo delivery to meet immediate demand. This shift reflects a broader market trend where speed to market has become a critical competitive advantage. Companies are exploring various operational and structural methods to release additional volumes quickly. The urgency is driven by the need to secure lucrative short-term opportunities within existing export capacities. This approach contrasts with the slower timelines typically associated with new infrastructure development. The current market environment favours solutions that can be implemented with minimal delay. Participants are therefore looking to optimise existing assets rather than waiting for new projects to come online. This strategic pivot is evident across both the export and import sides of the global LNG trade. The emphasis on speed is a direct response to the current price environment and supply constraints.

On the export side, executives noted that while long-term agreements cover the majority of facility capacity, the remaining spot market is highly valuable. Mike Buck, Senior Vice President at Worley, stated that the primary focus is on how to get extra cargo out. He suggested that companies can consider downtime planning to boost production from existing facilities. For new projects, modular designs are being adopted as a shortcut to market. ExxonMobil is utilising this approach in Mozambique, opting for modular structures over larger trains. On the import side, Alvin Gan, Executive Vice President at Seatrium, highlighted the benefits of converting vessels into floating storage regasification units. He described this method as more cost-effective and quicker than building new infrastructure. Gan noted that energy security and diversification are key geopolitical drivers, with speed facilitating immediate diversification. Europe has emerged as a region of particular interest, with numerous inquiries received from across the area. Seatrium is also involved in newer technologies such as offshore wind, ammonia, and hydrogen. However, Gan maintained that traditional oil and gas sources remain essential, predicting LNG will stay relevant for the next five to ten years.

Seatrium is collaborating with Turkey’s Karpowership on powership plans to bypass land-based infrastructure issues. These vessels are considered among the quickest options for providing additional power sources. However, obstacles to speed exist due to high demand for key equipment. Slots for securing FSRU engines are being pushed back to 2029 or even 2030. Buck agreed that new liquefaction projects take years, with permitting often being the longest phase. He emphasised the need for standardised fiscal conditions, noting challenges in countries without prior development experience. The United States has been an exception, with liquefaction plans operating on a tolling basis. This model is changing, with a growing trend towards controlling the value chain from well to plant. Middle Eastern exporters are also diversifying their portfolios to avoid geographic chokepoints. Companies such as Abu Dhabi’s XRG and QatarEnergy are working on projects globally, including in Argentina. This diversification creates a wider pipeline of work for contractors. They must become more nimble in different geographies and better understand the global supply chain to meet these evolving demands.