North American LNG Sector Facing Crisis

Reduced demand due to economic slowdown, coupled with the COVID-19 outbreak, has led to cancellations of long-term LNG supply contracts and cargo deferments by importing counties. This has led to low utilisation of liquefaction capacity, primarily in the US – one of the key suppliers of the super-chilled gas globally. Furthermore, the fall in gas prices deepens the crisis for LNG suppliers and upstream gas producing companies in the region, says GlobalData, a data and analytics company.

Haseeb Ahmed, Oil and Gas analyst at GlobalData, comments: “Due to a sharp fall in in oil prices, spreads between oil-indexed long-term LNG contracts and spot contracts have reduced considerably. As a result, LNG producers might struggle to leverage higher value long-term contracts for weaker spot prices that can keep their revenues up”…


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