The US Trade Representative (USTR) has proposed removing the threat of revoking LNG terminal export licences under new rules governing LNG exports.
The proposed rules set out in April stipulate that a certain percentage of US LNG exports should be shipped on US LNG carriers, rising from 1pc in 2028 to 15pc in 2047. But the US does not presently have the infrastructure to build LNG carriers, casting doubt over the proposals.
Under the April proposal, compliance with the rules was to be enforced by the threat of a potential revocation of LNG terminal export licences, meaning that LNG terminal operators had the responsibility of ensuring compliance, instead of shippers.
The USTR has now proposed shifting the responsibility for meeting the targets to the shipper, with the recent amendments stating that shippers now have to report the amount of LNG exports shipped on US LNG carriers, and the amount exported on non-US built carriers.
This would be more aligned with rules on port fee proposals for other types of vessel, where port fees are paid by the shipper, not the terminal operator.
But the USTR is yet to state how it would ensure that a certain amount of US LNG is exported on US LNG carriers, as it has not stated a port fee or tariff system as it has done for other vessel classes.
And it is unclear if each shipper has to individually hit the targets each year. Many offtakers load only a single digit number of cargoes each year, so to meet 1pc of LNG exported by US LNG carriers, they may still be required to load one US LNG carrier each year, thereby overcomplying with the regulations, and leading to a total higher percentage of LNG being exported on US LNG carriers.
