NRG GLNG: Baker Hughes predicts 3 to 4 LNG FIDs in 2021
Oilfield services firm Baker Hughes has reiterated its expectations that demand for LNG will grow in the longer term. Baker Hughes’ chairman and CEO, Lorenzo Simonelli, said during the firm’s fourth-quarter earnings call that it anticipated 3 to 4 LNG projects moving forward in 2021. This would be followed by “a robust pipeline” of LNG projects that Baker Hughes expects to reach the final investment decision (FID) stage beyond 2021.
The company’s outlook has been bolstered by the recent increase in LNG spot prices, which Simonelli said had “solidified a similar view for many of our customers and improved momentum for a number of projects”. He noted that one of the priorities for Baker Hughes’ Turbomachinery & Process Solutions (TPS) division was executing the “significant backlog” of LNG projects awarded in recent years.
Recent contracts awarded to Baker Hughes in the LNG space include an additional award for power generation for the North Field East LNG expansion project in Qatar in the fourth quarter of 2020. Simonelli noted that this followed the main refrigerant compression award, which the company booked in the third quarter of the year.
In the longer term, Baker Hughes expects natural gas to be a “transition and destination fuel” for broader energy consumption. Simonelli pointed to current trends such as accelerated coal-to-gas switching across several countries and LNG demand faring much better than other commodities during the 2020 downturn as reasons for longer-term confidence in the super-chilled fuel.
“As you look at it from a longer-term perspective, by 2030 we still need to have capacity of approximately 650-700mn tonnes of LNG in place,” Simonelli said in response to an analyst question. “And so you're looking at 50-100mn tonnes FID over the course of next three to four years. So we feel that that trajectory is very much in place and feel good about our opportunities in this space continuing.”