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Oil Crash Is a Double-Edged Sword for LNG Projects at Risk

  • Crude drop made some LNG cheaper but risks delaying projects
  • Lack of investment may help reduce supply, boost prices
Tour of Underground Storage Facility at Tepco's Futtsu LNG Terminal
Photographer: Tomohiro Ohsumi/Bloomberg
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Oil’s rout may have been an unexpected boon for the biggest buyers of liquefied natural gas, but its knock-on effects may come back to bite them.

That’s because more than a dozen proposed LNG export projects from the U.S. to Mozambique are at risk of being delayed or scrapped as crude careened to levels that make most of them unprofitable. If fewer of them come to fruition, that would ease a widening LNG supply glut later this decade and potentially lift prices amid breakneck demand growth in Asia.