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Exxon Mobil Corporation (XOM), CNOOC Limited (ADR) (CEO), Cheniere Energy, Inc. (LNG): Will U.S. LNG Exporters Benefit From Rising Asian Demand?

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Barclays  is predicting a global supply crunch for liquefied natural gas in 2014, thanks to resurging demand in Asia. As a result, global LNG demand growth will outstrip supply additions next year with global regasification capacity — a measure of demand — predicted to grow by 2.8 billion cubic feet, or bcf, per day. On the supply side, however, the bank notes that only 0.9 bcf per day will be added to global liquefaction capacity .

Image Source: Wikimedia Commons

Growth in Asian demand will primarily be led by China with five new regasification terminals expected to become operational by the end of 2014. Malaysia, Singapore, Indonesia and India are also expected to contribute to the demand. In fact, all regasification plants that are expected to come online next year are from Asia, barring one .

Exxon Mobil Corporation (NYSE:XOM)

Who benefits?
Evidently, a tightening LNG supply would mean natural gas prices moving north. With Asian demand leading the way, it shouldn’t be surprising to see prices shooting up in this region. The bottom line is that the likes of Exxon Mobil Corporation (NYSE:XOM) and other existing LNG producers with access to Asian markets should benefit.

Exxon Mobil Corporation (NYSE:XOM)’s Qatar and Indonesian ventures have a liquefaction capacity of 65 million tonnes per year . The behemoth is also gearing up to start LNG production at its Papua New Guinea plant by the second half of 2014, where it holds a 33% stake. With more than 90% of the $19 billion project completed , initial liquefaction capacity is expected to be 3.45 million tonnes per year. Eventually, production will be ramped up to 6.9 million tonnes a year .

Another facility coming online next year is the Queensland Curtis LNG project which is expected to add 8.5 million tonnes a year  through its liquefaction facility in Curtis Island off Australia. CNOOC Limited (ADR) (NYSE:CEO) holds a 10% stake in one of the two LNG trains, along with a 5% stake in certain tenements.

Cheniere Energy, Inc. (NYSEMKT:LNG)‘s six trains of liquefaction facilities at its Sabine Pass terminal are still under construction. The first train isn’t expected to achieve initial LNG production before late 2015. However, Cheniere Energy, Inc. (NYSEMKT:LNG) has already entered into fixed price, 20 year agreements with Korean and Indian gas companies . The Sabine Pass terminal, which is held through its 57.5% stake in MLP Cheniere Energy Partners LP (NYSEMKT:CQP), has a total liquefaction capacity of 27 million tonnes per annum through its six trains.

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