Global LNG Demand to Benefit North American Natural Gas Pipelines
Ongoing geopolitical events and the recent spiraling energy costs have highlighted the need for energy reliability and security around the world. Growing demand for natural gas and global liquified natural gas (LNG) exports continues to drive higher volumes across pipeline transportation networks and supports the need for well-connected and reliable energy infrastructure assets. Pipeline and midstream energy companies with strong logistics platforms in natural gas transportation and storage that connect low-cost natural gas supply basins to LNG liquefaction facilities stand to benefit from the growth in global LNG demand.Key Highlights
-- Geopolitical factors, global population growth, urbanization, and a growing middle class in Asia continue to drive up the demand for energy.
-- The European energy crunch is squeezing global gas supplies with Europe and Asia competing for limited LNG exports from the U.S. and Qatar, causing a spike in international natural gas prices.
-- The U.S. has demonstrated tremendous LNG export growth over the past five years, and North American LNG export fundamentals are strong with an abundant supply of cost-competitive and relatively inexpensive natural gas. Complementing this strength is the growing North American LNG liquefaction capacity connected via pipelines and storage systems to key natural gas-producing basins.
-- Pipeline companies with incumbent positions and long-term contracts to supply natural gas feedstock to operating LNG facilities and those with contracts on projects that are under construction or in the process of reaching final investment decisions are likely to have a strong competitive advantage and enjoy the growth in the global LNG export market.
“LNG facilities and new projects are mostly underpinned by long-term offtake agreements for the sale of LNG to buyers with terms up to 15 or 20 years. This requires the LNG export facility to have a source of reliable and steady long-term supply of natural gas for liquefaction and storage that is tied into natural gas pipelines with long-term contracts,” said Ram Vadali, Senior Vice President of Natural Resources and Pipelines, Global Corporate Finance. “Long-term take-or-pay contracts provide cash flow security through business cycles. DBRS Morningstar considers cash flows that are contractually secured on a long-term basis by strong counterparties and diversification across both domestic and export markets as credit supportive.”
Enbridge is an energy transportation and distribution companyoperating in 5 segments: Liquids Pipelines, consists of common carrier and contract crude oil, natural gas liquids and refined products pipelines and terminals; Gas Distribution, of Co.'s natural gas utility operations; Gas Pipelines and Processi consists of investments in natural gas pipelines and processing facilities; Green Power and Transmission, consists of Co.'s investments in renewable energy assets and transmission facilities; and Energy Services, consist of physical commodity marketing activity and logistical services.
KeyCorp is a bank holding company. Through its principal subsidiary, KeyBank National Association and certain other subsidiaries, the company has the following main business segments: Consumer Bank, which serves individuals and small businesses by providing a variety of deposit and investment products, personal finance and financial wellness services, lending, mortgage and home equity, student loan refinancing, credit card, treasury services, and business advisory services; and Commercial Bank, which is focused principally on serving the needs of middle market clients in the following industry sectors, including consumer, energy, healthcare, industrial, public sector, real estate, and technology.
Kinder Morgan is an energy infrastructure company. The company's segments are: Natural Gas Pipelines, which includes the ownership and operation of, among others, main interstate and intrastate natural gas pipeline and storage systems; Products Pipelines, which includes the refined petroleum products, crude oil and condensate pipelines; Terminals, which includes the ownership and/or operation of, among others, liquids and bulk terminal facilities; and carbon dioxide (CO2), which includes the production, transportation and marketing of CO2, ownership interests in and/or operation of oil fields and gasoline processing plants in West Texas.
TransCanada is an energy company. Co. operates three business segments: natural gas pipeline, which transports natural gas across Canada, the U.S. and Mexico, and has regulated natural gas storage facilities in Michigan with a total capacity of 250 billion cubic ft.; liquids pipelines, which consists of wholly-owned and operated crude oil pipeline systems that connects Alberta and U.S. crude oil supplies to U.S. refining markets, as well as connecting U.S. crude oil supplies from the Cushing, OK hub to refining markets in the U.S Gulf Coast; and energy, which includes a portfolio of power generation assets in Canada and the U.S., and unregulated natural gas storage assets in Alberta.
TransGlobe Energy is engaged in oil and gas exploration, development and production and the acquisition of properties within the Arab Republic of Egypt and the Republic of Yemen.
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