Biden May Lift LNG Export Ban To Win Ukraine Aid

Markets are impatiently awaiting a decision from the White House that could see the ban on new LNG export projects lifted as the Biden administration seeks leverage in winning Republican approval for an extensive aid package to Ukraine, Reuters reports. Late on Tuesday, Reuters reported that the White House was considering a reversal of its late January decision to pause new LNG export projects, with two anonymous White House sources saying that lifting the ban could be rewarded with Congressional approval for new aid to Ukraine in its conflict with Russia. 

The potential for such a trade-off was suggested during a Sunday interview that aired on Fox News with Republican U.S. House of Representatives Speaker Mike Johnson, who indicated that the Republican Party would be more likely to support Ukraine in the event of a reversal of the LNG project pause. “We want to have natural gas exports that will help unfund (Russian President) Vladimir Putin’s war effort there,” Johnson told Fox News. 

The Biden administration paused permit approvals for new LNG export projects in January citing uncertainty about the outlook for U.S. supply from the late 2020s onwards.

Last year, the U.S. overtook Qatar to become the world’s largest LNG exporter. Now, Qatar is stepping up investment and development, eyeing an 85% increase in its LNG export capacity by 2030 as it seeks to dominate the market. 

Earlier this year, Qatar said it was adding another major LNG expansion project to its two ongoing projects, and is now proceeding with the North Field West project, after drilling appraisal wells at the world’s largest natural gas field, the North Field it shares with Iran, and finding “huge additional gas quantities” in the field. On Sunday, QatarEnergy said it had signed long-term time charter party (TCP) agreements with four international shipowners for the operation of 19 new conventional-size LNG vessels, bringing the total of long-term chartered vessels for LNG exports to 104.

By Charles Kennedy for Oilprice.com

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