Oil Crash Is a Double-Edged Sword for LNG Projects at Risk

Oil Crash Is a Double-Edged Sword for LNG Projects at Risk

Crude drop made some LNG cheaper but risks delaying projects. Almost 20 proposed export plants are vying for a shrinking pool of capital after a record number of terminals reached final investment decisions last year.. "With significant downward pressure on spot LNG prices and oil prices, it could be the double-whammy that really starts to make some projects seem uneconomic," Jeff Moore, an analyst with S&P Global Platts, said in an email.. "If oil prices stay low for much of this year, I would imagine it could have a material impact on supply projects looking to reach FID this year.". On the flip side, fewer LNG projects taking a FID in 2020 and 2021 will likely translate into lower global supply between 2024 and 2027, Giles Farrer, research director at WoodMac, said Wednesday in a report.. Without supply deals or portfolio players willing to agree to purchase potential exports, it is challenging for a project to clinch a final investment decision.. The company was forced to slash almost 40% of its workforce as part of a cost-cutting move and a final investment decision could be delayed by at least a year..