By Scott DiSavino

(Reuters] – The demand for liquefied gas (LNG), has never been greater, however North American developers have not approved any new projects in the last weeks of this year.

The global prices of natural gas are at record heights as utilities across Europe and Asia battle for any LNG cargoes available before winter. The LNG market has grown every year since 2012 with a 40% increase in demand. This is because utilities are substituting dirty coal for gas, but the supply of LNG has not kept up to demand.

Market growth has prompted rapid development of LNG terminals in large exporters, including the United States. These terminals are expected to be the world’s largest LNG producers by capacity next year.

However, 2020 saw a halt in spending for new projects due to the low price of coronavirus-induced destruction demand. Buyers stopped signing long-term supply contract agreements.

Around a dozen businesses signaled plans for final investment decision (FID), on the proposed projects, at the beginning 2020 and again in 2021. One, however, was not. Sempra Energy (NYSE:) Costa Azul, Mexico’s largest construction site, began in 2020. Numerous others were added to the project by 2022.

Reid Morrison of PwC Houston said, “We are setting up for an structural shortage in LNG capacity.” Given the net zero commitments made by different countries, there is some hesitation about taking a long-term natural gas position.

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Several North American projects are possible in 2022. They will be concentrated in Texas and Louisiana. The International Gas Union predicts that the world’s demand for gas in 2022 will exceed 356.1 MTPA by 2020.

However, these projects are unlikely to be sufficient to address the rising demand over the medium term as new LNG production takes between three and five years.

Anatol Feygin is chief commercial officer of Cheniere Energy, a U.S.-based LNG producer. According to Feygin, the market is calling for more capacity.

Two projects could be given the green light later in the year, Pacific Energy Corp Ltd’s Woodfibre (British Columbia) and Venture Global LNG’s Plaquemines (Lawrence).

The U.S. government granted Venture Global permission to start early site work on Plaquemines, and units of China Petroleum (NYSE:) & Chemical Corp, or Sinopec (NYSE:), agreed to long-term LNG purchase agreements with the company.

Plaquemines can produce 20 MTPA (or 2.6 billion cubes per day) of LNG. Five million homes can be provided with one billion cubic feet per day from the gas. The first LNG will be produced by the company in 2024.

Venture Global refused to comment. Venture Global stated on its website that it would make a decision about Plaquemines during the fourth quarter 2021.

Venture Global is currently developing or constructing 70 MTPA in Louisiana for its LNG export capability. The Calcasieu 10-MTPA in Louisiana will begin production in the coming year.

According to analysts, Pacific Oil and Gas’ Woodfibre could produce around 2.1 million MTPAs of LNG. But that would not happen until 2025. Despite the fact that it has agreed to sell 1.5 MTPA to British oil company BP (NYSE 🙂 PLC in 15 years, Pacific Oil and Gas have not yet made a final decision.

Rebecca Scott, Woodfibre LNG spokesperson told Reuters that the company is still finalizing its construction contract. She said she was optimistic that Woodfibre LNG will move forward this year.