I note that there is no mention of Canadian LNG. Is this not relevant?
Historically, the US was effectively Canada's only customer for LNG exports. That gave the US strong pricing power which it largely exploited to is advantage.
The US economy was a beneficiary of cheap and plentiful LNG from north of the border.
But that's changed. Canada has now built the infrastructure that has enabled it to export LNG internationally and it is anticipated to become a major player in the global market.
This means that the US has lost it's pricing power and will need to pay more for it's LNG imports.
The Trump administration has also caused US/Canada relations to decline markedly, which does nothing to improve the situation.
I would imagine that this plays into your narrative of rising US gas prices going forward. I welcome your thoughts.
I will write more about Canadian LNG in the future. Short version is that I think the situation is fairly different than in the US--that the remaining gas inventory is much more plentiful and that the pipeline expansion economics are worse, so Canadian LNG I think makes a lot more sense than US LNG at this point.
Excellent post. Thank you.
I note that there is no mention of Canadian LNG. Is this not relevant?
Historically, the US was effectively Canada's only customer for LNG exports. That gave the US strong pricing power which it largely exploited to is advantage.
The US economy was a beneficiary of cheap and plentiful LNG from north of the border.
But that's changed. Canada has now built the infrastructure that has enabled it to export LNG internationally and it is anticipated to become a major player in the global market.
This means that the US has lost it's pricing power and will need to pay more for it's LNG imports.
The Trump administration has also caused US/Canada relations to decline markedly, which does nothing to improve the situation.
I would imagine that this plays into your narrative of rising US gas prices going forward. I welcome your thoughts.
I will write more about Canadian LNG in the future. Short version is that I think the situation is fairly different than in the US--that the remaining gas inventory is much more plentiful and that the pipeline expansion economics are worse, so Canadian LNG I think makes a lot more sense than US LNG at this point.
What about LNG oversupply,
potentially?
yes good question! Post on that specifically coming after Thanksgiving
Great read and great to see a new gas analysis blog — very hard to find good commentary/analysis in this field. Look forward to future writings!