DAVID BLACKMON: LNG Will Play Major Role In Trump’s ‘Energy Fortress America’

Critics and fans alike of President Donald Trump have recently taken to accusing him of attempting to build an “Energy Fortress America” in his second presidency. If that’s true, U.S. LNG will be a watchman on the fortress’s walls.

The pace of commissioning and construction of additional U.S. LNG export projects has accelerated in the wake of Iran’s attack on Qatar’s major LNG hub at Ras Lafan. QatarEnergy declared a force majeure situation following the mid-March missile attack, saying the completion of full repairs would take three to five years. That removed roughly 17% of global LNG production from the market, though QatarEnergy says it will be able to execute a partial restart as soon as late April.

QatarEnergy has not provided exact specifications detailing its remaining production capacity once a restart is executed, but it is known that at least two of the plant’s 14 trains will remain offline until replacement equipment – made by only three companies worldwide – can be acquired and installed. Supply chains for the needed parts are backed up for years. Satellite imagery recently showed heat signatures from two of the Ras Laffan trains, indicating they could be capable of a fast restart. But even that remains up in the air unless and until Iran’s stranglehold on tanker traffic through the Strait of Hormuz is resolved.

Energy consultancy Wood MacKenzie cautions against optimism about a restart in the near term. “The ceasefire means it may be possible for the 14 trapped laden LNG cargoes in the Gulf to exit the Strait of Hormuz and provide some relief to the global gas market,” Tom Marzec-Manser, head of Europe Gas and LNG for Wood-Mac, said this week. “But for there to be a real structural change in supply, the Ras Laffan site in Qatar would need to restart its 12 operable trains. It is unclear if QatarEnergy would consider doing this during a ceasefire, however.”