Aurex Insights: US LNG Practice

Q4 2019

US LNG Market Review 2019

Welcome to the latest edition of Aurex Group’s quarterly update for the US LNG market. In this issue, we will be providing an overview of the major market movements which have inPuenced the industry over the last quarter as well as a summary of some of the notable industry topics from 2019. If you would like to gain additional insight into the hiring trends or opportunities that are occurring as a result, please reach out to our specialist team at info@aurexgroup.com for a confidential discussion.

US LNG Market Trends

US LNG Export Projects Fully Approved by the DOE and FERC in 2019

Project

Location

Proposed Design Capacity (Bcf/d)

Cameron LNG – Trains 4 & 5

Hackberry, LA

1.41 Bcfd

Corpus Christi – Train 3

Corpus Christi, TX

0.70 Bcfd

Driftwood LNG

Calcasieu Parish, LA

4.00 Bcfd

Freeport LNG- Train 4

Freeport, TX

0.72 Bcfd

Golden Pass Products

Sabine Pass, TX

2.10 Bcfd

Gulf LNG Liquefaction

Pascagoula, MS

1.50 Bcfd

Lake Charles LNG

Lake Charles, LA

2.20 Bcfd

Magnolia LNG

Lake Charles, LA

1.08 Bcfd

Port Arthur LNG- Trains 1&2

Port Arthur, TX

1.86 Bcfd

Sabine Pass – Train 6

Sabine Pass, LA

0.70 Bcfd

Venture Global Calcasieu Pass

Cameron Parish, LA

1.41 Bcfd

Eagle LNG Partners

Jacksonville, FL

0.13 Bcfd

Venture Global Plaquemines

Plaquemines Parish, LA

3.40 Bcfd

Texas LNG

Brownsville, TX

0.55 Bcfd

Rio Grande LNG

Brownsville, TX

3.60 Bcfd

Annova LNG

Brownsville, TX

0.90 Bcfd

Total

 

26.262 Bcfd

Notable Q4 FERC Approvals

  • Eagle LNG – Jacksonville, FL (October 2019)
  • Venture Global Plaquemine LNG – Plaquemine Parish, LA (October 2019)
  • Texas LNG – Brownsville, TX (November 2019)
  • Next Decade/Rio Grande LNG – Brownsville, TX (November 2019)

New Pricing Drivers

As the commoditization of LNG continued through 2019, we witnessed the next phase with LNG pricing being driven by US LNG export projects which have been traditionally indexed to Henry Hub. The benchmarks that gained the most traction were priced against Brent and the Platts Japan Korea Marker (JKM). Other options include buyers being ouered LNG priced against other US gas indexes including Agua Dulce and Waha, as demonstrated by NextDecade.

Jagnathan, J. (2019). NextDecade says it is first to sign U.S long-term, Brent-linked LNG contract. Reuters.

We have seen for the first time a Japanese buyer utilizing a coal-based pricing index in an LNG contract, with Tokyo Gas signing a long-term supply deal with Royal Dutch Shell. The pricing structure based on coal indexation will be used for part of the supply, with the remainder being priced ou conventional gas- and oil-linked indexes.

Obayashi, Yuka. (2019). Tokyo Gas, Shell sign LNG deal linked to coal pricing in rare move. Reuters.

New Mechanisms to Manage Risk

In October, exchange operator CME Group launched a futures contract with 24 delivery months for LNG that is physically delivered at Cheniere Energy’s Sabine Pass export terminal. This contract acts as a new mechanism for LNG buyers to manage their risks, and ultimately bring more transparency to the market.

Zawadzki, S. (2019). CME launches U.S. LNG futures contract with physical delivery. Reuters.

Global Oversupply of Natural Gas

Global Natural Gas prices have continued to decline throughout 2019 and some speculators are expecting the downward direction to continue into 2020. There have been a number of factors that have contributed to the downturn. The new natural gas discoveries in Russia and Australia, the slowing of fuel demand from Asia and the emergence of renewable electricity generation have all contributed. If this trend holds, the LNG boom of previous years in 2018 and 2019 could be coming to an end.

Roux, L. (2019). Global gas prices to remain pressured by LNG oversupply in 2019-20:BP. S&P Global.

Notable Market Moves (Q4 ’19)

  • Oleg Polotsky left National Grid and joined Bechtel Oil, Gas, & Chemicals, in Houston, TX, as Manager, Startup And Commissioning, APCI, LNG.
  • Somyajula Shridhar Rao left Chiyoda Corporation and joined Bechtel Oil, Gas, & Chemicals, in Houston, TX, as Sr. LNG Technology Manager.
  • Corey Goulet left Steelhead LNG and joined Kiewit, in Calgary, AB, as VP, Markets and Strategy, Canada.
  • Aaron Drucker left Wison Oushore & Marine and McDermott International Inc., in Houston, TX, as McDermott International Inc., in Houston, TX, as Commercial Director Onshore – NCSA.
  • Christine Cox left Precision Drilling and joined McDermott International Inc., in Houston, TX, as Principal Environmental Specialist.
  • Jonathan Robillard left LA Ofice of State Lands and joined Venture Global LNG, in Lafayette, LA, as Pipelines, Permits, & Relationships Manager.
  • Michael Diamond left BASF and joined Venture Global LNG, in Port Arthur, TX, as Director of HSSE.
  • Dyan Wold left SoCalGas and joined Sempra LNG, in Los Angelas, CA, as Controller.
  • John Sowers left APTIM and joined Sempra LNG, in Houston, TX, as Chief Transformation Oficer.
  • Daniel Glazner left Toshiba America LNG Corporation and joined Hanwha General Chemical, in Houston, TX, as Senior Director, Commercial.
  • Kathleen Bradley left Center for Creative Leadership and joined NextDecade, in Houston, TX, as Associate General Counsel, Project Finance.
  • Dimitri Tagaropulos left Akin Gump and joined NextDecade, in Houston, TX, as Projects AGC.
  • Tim Nguyen left Weingarten Realty and joined Freeport LNG, in Houston, TX, as Corporate Accounting & Fixed Assets Manager.
  • Jana Russell left US Ecology, Inc. and joined Cheniere Energy, Inc., in Corpus Christi, TX, as Compliance Coordinator.
  • Steve Canning left KBR, Inc. and joined Cheniere Energy, Inc., in Houston, TX, as Director, Information Management.
  • Victoria Salem left Oxy and joined Cheniere Energy, Inc., in Houston, TX, as Managing Counsel, Finance.
  • Autumn Kiser left Basic Energy Services and joined Cameron LNG, in Houston, TX, as Sr. Fixed Asset Accountant.
  • Carolyn Normand left Shell and joined Pieridae Energy Limited, in Calgary, AB, as VP Operations.
  • Gary Ritter left Xpress Natural Gas and joined Excelerate Energy, in Boston, MA, as Director, Gas Marketing.
  • Maurice Butler left Shell and joined LNG Canada, in Calgary, AB, as Corporate HSSE Coordinator.
  • Aubrey Regan left Jacobs and joined LNG Canada, in Calgary, AB, as Principal Contract Manager.
  • Curtis Johnson left Imperial Oil and joined ExxonMobil, in Calgary, AB, as LNG Planning Advisor.
  • Jorge Robles-Martinez left Shell and joined LNG Canada, in Calgary, AB, as Asset Commercial Lead.
  • Nigel Fisher left Teck Resources Limited and joined Woodfibre LNG Limited, in Vancouver, BC, as Environmental Manager.
  • Chad Crain left Cameron LNG and joined Venture Global LNG, in Lake Charles, LA, as Director of Training, Competency & Assurance.
  • Diana Ng left Evolent Health and joined Venture Global LNG, in Washington, DC, as Assistant Controller.
  • Daniel Gaw left ConocoPhillips and joined Venture Global LNG, in Houston, TX, as Director, Information Management.
  • Mehrdad Saidi left Woodfibre LNG Limited and joined Venture Global LNG, in Houston, TX, as Vice President.
  • Bryce Russell left BAR Scheduling, LLC and joined Venture Global LNG, in Washington D.C., as Manager, Project Reporting.
  • Heath Luke left Southwestern Energy and joined Tellurian Inc., in Houston, TX, as Director of Reservoir Engineering.
  • Darya Swaby left Goodman Manufacturing and joined Sempra LNG, in Houston, TX, as Strategic Procurement Principal.
  • V. Rao left Toshiba America LNG Corporation and joined Ryvel Energy Advisors LLC, in Houston, TX, as Managing Partner.
  • Kelly Rodriguez left Toshiba America LNG and joined Sempra LNG, in Houston, TX, as Sr. Project Development Advisor.
  • David Matteson left Toshiba LNG, Inc. and joined NextDecade, in Houston, TX, as Senior Director, Finance and Budgeting.
  • Leonardo Zambrano left Toshiba America LNG Corporation and joined NextDecade, in Houston, TX, as Senior Manager, LNG Marketing.
  • Brennan Thom left Sasol and joined Cheniere Energy, Inc., in Lake Charles, LA, as Marine Coordinator.
  • Seth Courtney left BP and joined Cheniere Energy, Inc., in Houston, TX, as Contracts Manager, O/M Capital Projects.
  • Ramiro Cantu left PBF Energy and joined Cheniere Energy, Inc., in Beaumont, TX, as Supply Chain Site Manager – Sabine Pass LNG.
  • Juan Morteo left Woolpert and joined Cheniere Energy, Inc., in Housotn, TX, as Geographic Information Systems Analyst.
  • Ginni Sinha left TD and joined Canaport LNG LP, in New Brunswick, Canada, as Analyst, Planning and Control.
  • Thalia Aspeslet left Shell and joined Pieridae Energy Limited, in Calgary, AB, as Community Liaison Oficer.
  • Gaylyn Fox left McDermott International Inc. and joined Excelerate Energy, in Houston, TX, as Head of Procurement & Supply Chain Management.
  • Antonino Riccobono left Ecology and Environmental Inc. and joined SWCA Environmental Consultants, in Miami, FL, as Director of Energy Export Development Projects.
  • Michael Filipchuk left Chevron and joined LNG Canada, in Calgary, AB, as Permit Issuer.
  • Mike Current left EverPower Wind Holdings, Inc. and joined JERA Americas, in New York, NY, as VP of Project Finance.
  • Craig Hallden left Shell and joined LNG Canada, in Calgary, AB, as Indigenous Relations Manager.
  • Kenneth Klutts left Cameron LNG and joined Sempra LNG, in Houston, TX, as Lead Environmental Inspector.
  • Duane Bertrand left Wison Oushore & Marine and joined Western LNG LLC, in Houston, TX, as Senior Vice President.
  • Carl Landre left Southwest Gas Corporation and joined Venture Global LNG, in Houston, TX, as Vice President, IT Infrastructure and Operations.
  • Bret Shapot left Canyon Midstream Partners and joined Venture Global LNG, in Houston, TX, as Engineering Manager.

Our Team

Adam Skinner

Partner, Global Energy &

Head of LNG

Morgan Scott

Research Associate,

LNG Practice

Sophie Rao

Research Associate,

LNG Practice

Alexa Montagna

Research Associate,

LNG Practice

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