Raymond James Energy Stat of the Week
by J. Marshall Adkins

Energy Stat: U.S. LNG Exports Set for Breakout Year in 2018, but Canadian Projects Still Languishing
April 24, 2017

It was all the way back in 2012 that we started actively writing about the notion that North America could plausibly become a sizable exporter of LNG. Until just the past year, it was entirely a ''show-me'' story. Now that Sabine Pass has become a bona fide driver of gas demand, there is proof of concept, but volumes are still not needle-moving in the context of the world's largest gas market. That will not change much in 2017, but 2018 is shaping up to be a breakout year for LNG exports.

The reason is simple: for the first time, 2018 should see exports from four separate LNG projects, versus just one currently. To be sure, the ramp-up at each individual project will take time (frequently longer than expected), so the significance of startup headlines should not be exaggerated. That being said, we project LNG exports averaging 2.5 Bcf/d in 2018 - up from 0.5 Bcf/d in 2016 and 1.2 Bcf/d in 2017 - en route to about 9 Bcf/d in 2021. Finally, the resulting uplift for gas demand is about to become economically relevant (though the concurrent supply growth makes the overall picture far from bullish). All of this is coming from U.S. LNG facilities, since none of the Canadian projects are currently in construction. U.S. and North American LNG exports will be interchangeable until at least the end of the decade. In today's Stat, we provide an update on the landscape, and address the disconnect between the U.S. and Canada in LNG development.

This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.

There is no assurance any of the trends mentioned will continue in the future. Past performance is not indicative of future results. Investing involves risk and investors may incur a profit or a loss. Specific sector investing can be subject to different and greater risks than more diversified investments. Investing in commodities is generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only form a small part of a diversified portfolio. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The S&P 500 is an unmanaged index of 500 widely held stocks. The Oil Services Index (OSX) comprises 15 of the largest oil service companies. The S&P SuperComposite Oil and Gas Exploration & Production Index (S&P Oil and Gas E&P) consists of all oil and gas exploration and production stocks included in the S&P SuperComposite 1500 Index. Investors cannot invest directly in an index. Additional information is available upon request.