The elephant in the room is – at what market price will US producers stop producing LNG? Most of the price elements will be 100% Take or Pay. Its the buyer that carries price risk and therefore there is not much of an incentive to switch off. As long as HH stays low there is nothing to gain from switching off. US projects won’t stop producing. But unsanctioned projects face a tough time as new buyers will be wary of getting into this in the first place.
From mid-2018 to the end of 2020, US LNG export capacity will have increased by almost 7 billion cubic feet per day – nearly tripling.