Liquefaction projects in the Middle East and North Africa (MENA) region are likely to be put off due to the economic slowdown brought up by the Covid-19 pandemic, according to analytics company GlobalData.

“The cascading impact of global LNG supply overhang coupled with reduced demand may lead companies to withhold or delay their capital spends on upcoming multi-billion-dollar gas projects,” the firm said this week.

The deferment of projects in the period 2020-2025 is expected to cause late commencement of operations of capital intensive projects in the region, Kallanish Energy learns. But despite the uncertainty on the duration of these disruptions, GlobalData believes the capex guidance of these projects would remain undeterred in the longer term to meet future LNG demand.

“While the depressed financial market can prove challenging for LNG companies to find new investors to fund their projects, LNG buyers and suppliers would contemplate strategy revisions to remain competitive in the mid-term,” said analyst Haseeb Ahmed.

He believes that a possible economic recovery and favourable gas policies would drive natural gas demand growth in the region, and integrated gas projects, already announced, will be developed.

So far this year, there have been delays in projects in Qatar, Mozambique and Egypt, both in planned and active projects, Ahmed noted.

The financial investment decision (FID) on the Ras Laffan-North Field Expansion in Qatar, expected this year, is likely to be pushed to 2021 following a delay in the bidding process. FID for the Rovuma LNG in Mozambique has been deferred by a year, likely delaying its start up by similar timeframe.

Amid the challenges induced by Covid-19, the Egyptian LNG terminal suspended its work till mid-July; while a deal to restart the Damietta LNG terminal in June has fallen through.

This post appeared first on Kallanish Energy News.