U.S. LNG producers are scaling back ambitions and are looking to survive in what could be the worst economic environment since the Great Depression. U.S. LNG will get through this, but not without serious pain.

COVID is shaking assumptions about demand growth. Most industry analysts believed 2020 incremental world LNG demand growth would total about 15 – 25 MTPA. For context, the International Gas Union placed total LNG 2019 demand at about 355 MTPA in 2019, or at about 47 Bcf/d. LNG demand is not growing at a respectable rate of 4 – 6%, however. Indeed, world LNG demand may be declining. Natural gas is better insulated from market volatility than transport fuels in the pandemic: while many people can’t (or won’t) travel due to lockdown restrictions, electricity is a necessity for most world consumers. Still, industrial and residential LNG consumers are cutting back where they can. LNG demand could fall this year.