The coronavirus pandemic and concerns on climate change are threatening nearly half of global projects to construct LNG export infrastructures, according to research by Global Energy Monitor. The study found that at least 20 projects worth some $292 billion of 45 major LNG export projects in the pre-construction phase are facing delays to their financing.
The delays indicate a swift shift by investors away from the LNG market, which previously had been viewed as a promising fuel market. At the same time, slowing demand, growing competition from renewable energy, and rising awareness on climate change put extra pressure on the industry.
Andrew McDowell, the vice president of the European Investment Bank, said the report highlighted that Investing in new fossil fuel infrastructure, including LNG posed unacceptable risks and is increasingly an economically unsound decision. Last year, the bank decided to stop funding fossil fuel projects by the end of 2021.
LNG has been seen as a more environmentally friendlier fuel than coal because it emits less carbon dioxide when burned. However, climate scientists have warned that the rapid growth in the gas industry could jeopardize the target to achieve the temperature goals in the 2015 Paris climate accord. Besides, producing natural gas is associated with the leak of methane, a potent greenhouse gas.
