Several LNG projects are underway in Canada and Mexico at the same time, which may be more attractive to Asia than the American ones, since they will be located on the Pacific coast.
“While the development of LNG projects in the United States has suffered a series of setbacks in recent months, Canada and Mexico are looking to tap into the growing Asian market for the ultra-cold fuel.” – reports the Financial Times, citing analysts.
The publication notes that Canada and Mexico are developing several projects on the West Coast, which facilitates access to Asian markets since it is not necessary to go through the Panama Canal. Almost all LNG projects in the US are located in the Gulf of Mexico and tankers have to make the transition from the Atlantic to the Pacific Ocean.
Wood Mackenzie estimates that by 2040, Canada could potentially supply 36.2 million tonnes of LNG a year and Mexico another 36.7 million tonnes. At that point, US exports may grow to 325 million tonnes, but so far they are no more than 90 million tonnes.
“Canada has been experiencing delays in some LNG export projects for about a decade, largely due to permitting issues. But it has now set its sights on the Asian market with several projects, the first of which, Shell-led LNG Canada, is expected to come online in 2025.” – writes The Financial Times, adding that the second project will be the Cedar LNG floating terminal.
Mexico’s problem may be that it plans to receive gas from the Permian Basin in the United States, but for now the country is the largest importer of American gas and American companies themselves are considering options for LNG projects in Mexico.
“Rising labor and construction costs are affecting some major LNG export projects in the U.S., while regulatory challenges have emerged,” – continues The Financial Times.
On the one hand, the administration Joe Biden temporarily banned the issuance of new permits for LNG exports. Separately, for example, a U.S. appeals court revoked the permit for NextDecade’s Rio Grande LNG export project in Texas due to environmental issues.
