LNG mega-projects face funding evolution

The shifting risk and reward equations created by LNG’s commoditisation will lead to fundamental changes in financing

Increasing industry confidence that gas, and LNG in particular, will grow in importance at least in the first stage of the energy transition has been tempered with concerns surrounding the huge costs, complexities and delays typically associated with major LNG projects.  The path ahead for LNG seems clear. Led by China’s rapacious appetite, trade in the liquefied commodity is estimated to rise at a CAGR of about 4pc during 2018-40 to 757bn m3, according to the IEA’s World Energy Outlook 2018, while LNG use in bunkering is projected to increase at a CAGR of 11pc during 2025-40 to reach 49bn m3.  This rising demand is expected to create a shortfall by the early 2020s, the anticipation of which