U.S. President Joe Biden paused pending approvals of exports from new liquefied natural gas projects, a move cheered by climate activists that could delay decisions on new plants until after the Nov. 5 election.
TD Cowen says it sees the timing as “suspicious” and don’t expect finalized policy reform before election.
“We believe the global LNG market will be oversupplied in the second half of the decade and the oversupply suggests there will be limited new projects sanctioned in 2024, regardless of government approvals” – TD Cowen.
“Any delays to project sanctions today will take multiple years to manifest in the market,” the brokerage adds.
Unsanctioned projects with government approvals, such as NextDecade’s Rio Grande trains 4 and 5, could benefit as final investment decision (FID) probability increases – TD Cowen.
Companies with exposure to international pre-FID LNG projects and limited U.S. gas production could benefit if there are longer-term roadblocks to US LNG approvals, says the brokerage.
Some companies that can be impacted include Sempra and Energy Transfer.
Separately, Freeport LNG says it faces a month-long unit outage due to winter storm Heather.
(Reporting by Roshia Sabu in Bengaluru)