Global Gas Rally To Kickstart Long-stalled U.S. LNG Projects.

Tessa Davis, a partner in MoFo Singapore’s Energy & Infrastructure Group, is quoted in a recent Thomson Reuters article that discusses the impact of rising global gas prices on the prospects for new Liquid Natural Gas (LNG) projects.

The article argues that factors, including declining gas production in Europe and increased dependency on Russia, have pushed global demand and LNG gas prices to near record levels, highlighting the need for new plants in the United States and Asia. However, whilst a number of projects in the United States have recently been revived, buy-side risks still concern potential investors.

Tessa Davis, who has been involved in financing LNG projects in the Americas, Indonesia, and Qatar, comments, “The rise of LNG buyers in Southeast Asia, Africa, and South America aiming to build smaller regasification facilities or LNG-to-power projects presents hurdles for new suppliers.” She explains, “Investors remain wary of investing in new projects in which the expected revenue stream is supported by inexperienced or untested buyers”, and concludes that a shift to “inexperienced and less-creditworthy off-takers will increase the uncertainty financiers may have relating to the risk profile of new LNG projects.”