US LNG Exports will be Game-Changer: Ifri Report

“US LNG exports will revolutionise international trade in LNG” according to a recently published report from French think-tank, Institut Francais des Relations Internationales (Ifri).

Thanks to their price indexation to the US Henry Hub price, absence of destination clauses, and the projected volumes that will become available, US LNG exports will facilitate greater flexibility on world markets and more price convergence, the report says.

US LNG will be exported to the most profitable markets. However, author Sylvie Cornot-Gandolphe argues that US exports nonetheless represent a game-changer for the European market too, even if it’s difficult to forecast how much will be exported there. She believes that Europe should enhance the potential security this new supply provides, by filling gaps in its infrastructure system.

Cheniere's Sabine Pass LNG export complex in the US Gulf state of Louisiana (Photo credit: Cheniere Energy)

Sabine Pass train 1 started exports in February, with train 2 also commissioned, with more US projects now under construction, such that US export capacity could reach 84bn m³/yr by 2020, the report notes, by which time it could become the third largest LNG exporter after Australia and Qatar.

The author has worked as Cedigaz general secretary and as project manager at the UN Economic Commission for Europe’s gas centre, but since 2014 has been a research fellow at OIES in Oxford. Her paper can be downloaded at www.ifri.org or here.