What’s the issue?
2020 was supposed to be the biggest year ever for final investment decisions (FID) being made for LNG projects all around the country. Instead, we reached the end of the year and not one project had reached FID.
Why does it matter?
With all of the projects essentially chasing the same long-term contract parties and the competition being worldwide, there is a substantial likelihood that not all of the projects will be built.
What’s our view?
FERC typically imposes a time limit by which an approved project must be placed into service. While that time limit can be extended, some of the pending projects have already received one extension. Also, with the change in control at FERC that is coming this summer, future extensions may not be so easy to get. The time it typically takes for a project to move from the start of site preparation to in-service means many of the approved projects are already at risk of needing a further extension.
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