US Majors Scout LNG Growth

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US supermajors Exxon Mobil and Chevron said Friday they were looking into ways to increase their investments in LNG as global buyers scramble for supplies amid a tight market.

Chevron CEO Michael Wirth said the company had carried out discussions with several US LNG developers, though he gave few details about the talks.

Historically, Chevron has largely focused on Asian markets in the Pacific Basin; its Gorgon project in Australia, for example, is the largest single resource project in that nation’s history.

But the Atlantic Basin markets “look a little bit different” now, Wirth said on a first-quarter earnings call.

“As we flow gas from our West African assets into the Atlantic Basin, it may make sense for us to have some US supply as well,” Wirth said.

Exxon, meanwhile, already has a foothold in the US LNG industry with the Golden Pass facility it is building with Qatar Energy. CEO Darren Woods said Friday the project, which is slated to come on line in 2024, forms an important “anchor supply point” for the company’s trading arm.

“I think it's going to give us a lot of flexibility to supplement our longer-term contracts for our bigger projects, but to also participate in the spot market,” Woods said during the Exxon earnings call.

Opportunities Abroad

Chevron and Exxon also see opportunities to develop LNG supplies outside the US.

Wirth said Chevron, which operates the massive Leviathan gas field offshore Israel, is evaluating projects to increase production from the play to serve regional markets, including a potential floating development.

“We'd like to grow our LNG position, the world needs it,” Wirth said. “But it's got to compete for capital in our portfolio. ... So just because something looks good through the lens of growth and commodity exposure, it's also got to compete for capital in a disciplined budget. And so we’ll see which of those ultimately, if any, pass that screen.”

Exxon’s strategy leans heavily on its trading business. Woods pointed to the company’s geographic reach, from Golden Pass on the US Gulf Coast to its interest in the Eni-led Coral South FLNG project to its proposal for an LNG plant in Papua New Guinea.

“That's a very important part of our strategy in LNG going forward, is making sure that we've got barrels that we can then move and trade in the marketplace and move across the different regional demand centers,” he said. “And so I think we're going to continue to look for opportunities in LNG. It's an important part of the portfolio.”

Liquefaction, LNG Supply, Corporate Strategy , Earnings, Majors, Floating LNG, LNG Demand, LNG Projects
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