Baker Hughes to book $9 billion of LNG equipment orders in 2022/2023

US energy services firm Baker Hughes is on track to book almost $9 billion of LNG equipment orders across 2022 and 2023, the company’s executives said during the third-quarter earnings call.

Following record LNG equipment orders of some $3.5 billion in 2022, Baker Hughes booked $1.4 billion in LNG equipment orders in the first quarter this year and $900 million in the second quarter.

During the third quarter, Bake Hughes booked almost $2.5 billion of LNG equipment orders.

“Major awards during the quarter included liquefaction equipment for an FLNG project in the
Eastern Hemisphere and a major award to provide additional liquefaction equipment and a
power island to Venture Global LNG”, Nancy Buese, Baker Hughes CFO, told analysts during the company’s earnings call on October 26.

More LNG orders

Baker Hughes recently secured a “major” contract from compatriot LNG exporter Venture Global to provide a modularized liquefied natural gas (LNG) system and power island.

The contract was awarded under a master equipment supply agreement between Venture Global and Baker Hughes for more than 100 million tons per annum of production capacity, which was recently expanded from 70 mtpa.

During the second quarter, Baker Hughes secured an order for three main refrigerant compressors for NextDecade’s Rio Grande LNG project in Texas.

Baker Hughes also recently booked a contract worth more than $400 million ford Adnoc’s planned LNG export terminal in Al Ruwais.

Baker Hughes said it will book this contract in the fourth quarter of 2023.

CEO Lorenzo Simonelli said during the call that Baker Hughes continues to “see good uptake on the LNG side.”

“And we’ve booked $4.8 billion of LNG equipment orders. And we still expect more in the fourth quarter,” he said.

“Based on our expectations, we will book almost $9 billion of LNG equipment orders across 2022 and 2023,” Buese said.

LNG demand continues to rise

Simonelli said Baker Hughes expect 2023 LNG demand to approach 410 mtpa, or up about 2 percent compared to last year.

“With estimated global nameplate capacity of 490 mtpa this year, effective utilization is expected to be over 90 percent, which has historically represented a tight market,” he said.

Looking into 2024, Baker Hughes forecasts LNG demand to increase by 3 percent, which should result in utilization rates remaining at elevated levels as “we forecast just 15 mtpa of nameplate capacity coming online next year,” Simonelli said.

“Looking out to 2025 and 2026, we see a similar trend of supply growth being balanced by demand growth, which should keep global LNG markets at relatively strong utilization levels,” he said.

Similar levels of FID activity in 2024

Through the third quarter, 53 mtpa of capacity has taken FID this year, Simonelli said.

“For 2023, we expect to book LNG orders totaling approximately 80 mtpa, given we sometimes receive larger LNG orders before projects have taken FID,” he said.

Simonelli said the LNG project pipeline remains “strong”, both in the US and internationally.

“Therefore, we expect to see similar year-over-year levels of FID activity in 2024 and could see between 30 to 60 mtpa of LNG FIDs in both 2025 and 2026,” he said.

“Based on existing capacity, projects under construction, and future FIDs in the pipeline, we have line of sight for global LNG installed capacity to reach 800 mtpa by the end of 2030,” Simonelli said.

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