Scuttled U.S. LNG Project Falls Victim to Falling Oil Prices

by Ship & Bunker News Team
Friday January 2, 2015

Collapsing oil prices have led Texas-based Excelerate Energy to place on hiatus a planned liquefied natural gas (LNG) terminal project, the first U.S. LNG project to succumb so far, reports Reuters. 

The floating plant, which would have been located in the Lavaca Bay in Texas, was expected to export 8 million tonnes of LNG per annum. 

According to regulatory filings, the company blamed plunging oil prices leading to a "strategic reconsideration of the economic value of the project."

"Due to the recent global market conditions, the company has determined that, at this time, this project no longer meets the financial criteria necessary in order for us to move forward with the capital investment," said a spokesman. 

All activities are to be suspended until April 1, 2015, where the company will then provide updates. 

U.S. LNG projects are reportedly coming under pressure with the advent of the $60 barrel of crude, though securing Asian investors for multi-billion dollar projects had already faced hurdles prior to the slide. 

Contributing to LNG woes are reports that consumers in East Asia are now reportedly looking to offload some long-term LNG supply commitments. 

Excelerate announced earlier this year that it had won a bid to lead a LNG terminal project in Guinea for London-based Ophir Energy