US permitting woes could boost LatAm LNG export projects

Uncertainty surrounding liquefied natural gas (LNG) export projects in the US could spur investment in liquefaction developments elsewhere, including Latin America, according to energy industry services firm Baker Hughes. 

The US is the world's biggest LNG exporter but has seen permit processes for new projects slow under President Joe Biden, who has vowed to step up a transition away from fossil fuels. 

According to the US Department of Energy, review times for LNG export licenses have grown to 11 months or more compared to seven weeks under former President Donald Trump.

"If you look at any slowdown in the US there are clearly international projects that can take the opportunity and we'll continue to monitor the situation," Baker Hughes CEO Lorenzo Simonelli told analysts in a quarterly earnings call on Wednesday.  

There are currently eight active LNG export projects in Latin America and the Caribbean that require a combined capital expenditure of more than US$32bn, according to BNamericas' database. 

Mexico leads the way with four projects, including three on the Pacific coast, followed by Argentina with two, and Brazil and Suriname with one each. 

Three of the initiatives are already under construction, three are in the early design or feasibility stages and two others are awaiting a construction decision. 

"The benefit for us is that we play globally and with a total gamut of solutions around LNG and so when it comes to small modular, onshore, offshore, stick, floating [infrastructure]...you come to us. There are international opportunities," Simonelli added. 

Peru and Trinidad and Tobago are currently the only countries in Latin America and the Caribbean with the necessary infrastructure to liquify and export natural gas. 

However, increased supply of the fossil fuel – either through surging local production or, in the case of Mexico, cheap piped imports from the US – has led to booming liquefaction investments in the region.