Baker Hughes CEO sees huge LNG capacity investment in next two years

US energy services firm Baker Hughes expects LNG players to take final investment decisions for up to 150 million tonnes per year of new liquefaction capacity in the next two years, according to chief executive Lorenzo Simonelli.

Baker Hughes has provided its tech to about 50 LNG plants around the globe. The firm also recently won a contract from compatriot Venture Global LNG to supply a liquefaction train system for the first phase of the Plaquemines LNG export project in Louisiana.

The company sees a “significant increase” in LNG infrastructure investment in the next period as Europe looks to reduce its reliance on Russian gas and as countries around the globe seek cleaner fuels as well.

Given the current LNG price environment and the quickly changing dynamics, Baker Hughes expects that global LNG capacity would likely exceed 800 mtpa by the end of this decade to meet growing demand forecasts, Simonelli told analysts during the company’s first-quarter conference call on Wednesday.

This compares to the current global installed base of 460 mtpa and projects under construction totaling almost 150 mtpa.

“I think it’s clear the unfolding situation in Europe has definitely accelerated the pace of discussions on the next wave of LNG projects aiming to take FID,” Simonelli said.

He said Baker Hughes now expects 100 to 150 mtpa to take FID over the next 2 years, with the potential of more FIDs in 2024 and 2025.

“As you know, a lot of these projects are in the US,” he said. “But also as we look at other places such as Middle East, Mexico and also Asia, we’re seeing increasing interest from customers,” Simonelli added.

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