LNGL puts US listing on hold

LIQUEFIED Natural Gas Ltd is putting its plans to list in the US on hold to secure offtake partners for its North American projects, and a Houston-based manager told Energy News this morning that it has seen an uptick of discussion of late even amid market oversupply.
LNGL puts US listing on hold LNGL puts US listing on hold LNGL puts US listing on hold LNGL puts US listing on hold LNGL puts US listing on hold
LNGL announced this morning that the board has suspended all activity around redomiciling the company to the US to sort out offtake deals and develop the Mangolia project in Louisiana, which awarded a dredging contract to local firm Turners Bay in August.
"The board's decision allows management to maintain its focus on marketing the offtake at magnolia LNG and Bear Head LNG, to concentrate on opportunities to create additional long-term value for LNGL shareholders, and to strengthen liquidity," LNGL CEO Greg Vesey said.
LNGL chairman Paul Cavicchi said a US listing was still the "right step" for the company, but ensuring it proceeds deliberately and remaining attentive to shareholder expectations was the immediate priority.
The company has 16-20 million tonnes per annum of capacity under development and that there is a continuing demand for long-term contracts with LNG spot prices expected to rise.
Vesey told the North American Gas Forum this week that said LNG buyers' future portfolios would likely comprise 40% 20-year contracts, 40% 3-5-year contracts and 20% would be via the spot market.
"LNG demand may continue to increase as additional uses are found for the fuel, such as LNG bunkering," he said.
"Offtakers without long-term agreements leave themselves open to price volatility and unknown market dynamics."
Vesey said new buyers had been identified in new markets including eastern Europe, Jordan and Morocco, along with the largest growth market China and rising giant India.
Then there is South Korea, which has stated its intention to expand LNG imports.
However, LNGL's Houston-based senior manager investor relations Michah Hirschfield told Energy News this morning that the company was also looking to South America which is also importing LNG and Europe, which needs to diversify away from Russia.
"Buyers are realising that in order to have supply they need in 2022-23 when demand will outweigh supply they need to make a decision in the next 12-15 months on where they're going to get their LNG from," he said.
"We've seen an uptick in discussions which is positive, and we'll continue to have discussions with any credit-worthy partners who want to have those discussions with us."
While Asian markets and Latin America are being seriously considered, he emphasised that there are potential European partners who "want to diversify their base from Gazprom".
"They've been working with Gazprom for years but Gazprom has sometimes proved to be an unreliable partner, twice turning off the gas into Poland."
"Europe, South America, Asia are all potential partners as well as trading houses. The LNG market has become quite diverse and is getting more complex."
He said Gazprom could beat just about anybody in the market on price with their size and proximity, but from a geopolitical standpoint, having a diversity of supply from other parts of the world for Europe provides reliability and stability for those regions that need LNG.
LNGL was trading at 48.5c this morning.