US energy services firm Baker Hughes has booked $1.4 billion in LNG equipment orders in the first quarter this year, and the firm expects strong LNG project sanctioning activity in 2023 and 2024, according to the company’s CEO, Lorenzo Simonelli.
Following record LNG equipment orders of some $3.5 billion in 2022, Baker Hughes secured contracts from QatarEnergy for the North Field South (NFS) LNG project and for the first phase of Sempra’s Port Arthur LNG export project in Texas during the first quarter of this year.
The US firm recently also secured an order to deliver compressor trains for the new Petronas floating LNG producer.
Simonelli said during the company’s first-quarter earnings call on April 19 that the industrial and energy technology segment saw “another excellent quarter commercially, continuing on the strong momentum from the end of 2022.”
Gas tech equipment booked a number of LNG awards in the quarter, totaling almost $1.4 billion, he said.
65 to 115 mtpa of LNG in 2023
Simonelli said that LNG project sanctioning activity “has gotten off to a strong start in 2023 with 20 mtpa already reaching FID and other projects likely to soon follow.”
The FIDs include the mentioned Port Arthur LNG project as well as the second phase of Venture Global LNG’s Plaquemines LNG export plant in Louisiana.
“Contrary to conventional wisdom, we believe that recent declines in global LNG prices from the unsustainably high levels reached last year is a net positive for the sector, by supporting demand growth in key developing markets and bringing closer alignment on LNG pricing expectations between buyers and sellers,” he said.
“Based on conversations with existing and new customers, we see the potential for this LNG cycle to extend for several years with a pipeline of new international opportunities expanding project visibility out to 2026 and beyond,” Simonelli said.
He said that the company remains confident that “we will see 65 to 115 mtpa of LNG projects reach FID in 2023 and continue to see solid project activity in 2024 and 2025.”
The potential FIDs for this year include NextDecade’s Rio Grande LNG project, according to the CEO.
“2024 could be approaching the same FID levels we see in 2023”
In terms of pipeline of opportunities, he mentioned Cheniere’s planned 20 mtpa Sabine Pass expansion and “a number of international projects”.
“So based on what we see today, there’s a reasonable expectation that LNG FIDs in 2024 could be approaching the same FID levels we see in 2023. Still early call, but there are a number of projects that are moving towards that,” he said.
“And then it continues in 2025 and 2026, we also see a set of opportunities improving and with the potential for FID ranges between 30 to 60 mtpa each year,” Simonelli said.