Faced with political headwinds and an increasingly competitive global market, U.S. liquefied natural gas (LNG) developers remain undeterred as they look to opportunities on the horizon with the world sailing into a lower-carbon future.

That’s the outlook shared by U.S. LNG  executives during a panel at last week’s North American Gas Forum.

Trade tensions between the United States and China have created obstacles for developers looking to ink deals with one of the most important buyers in the global market, and the rhetoric coming from the U.S. presidential debates has raised the prospect of future regulatory risks.

Still, Cheniere Energy Inc.’s Senior Vice President Christopher Smith, who heads policy, government and public affairs for the Houston-based LNG developer, described a company vision focused on the bigger picture. The business cycle generally lasts longer than the political cycle, he said.

“The demand and supply fundamentals are going to remain intact,” Smith said. “We see a value proposition between the U.S. and markets in Asia, including China. Those opportunities will continue to unfold.”

But opportunities for U.S. LNG developers in China have been limited by the trade conflict between Washington, DC, and Beijing, at least for projects like Magnolia LNG that are looking to finalize offtake agreements and reach a final investment decision (FID).

That’s according to Greg Vesey, CEO of LNG Ltd., which is developing the Magnolia project near Lake Charles, LA.

“From a developer’s standpoint, the market is still very tough,” Vesey said. “In our case, we made a big push into China last year. With the advent of the trade wars, we’ve struggled to get through. The good news is we’re always looking around the rest of the world at the same time, and that the rest of the world is continuing to understand that.

“I think one of the things you’re seeing is a wave of momentum across the rest of the world. They don’t want to experience what China is experiencing. They want to get along with the U.S. and focus on the trade imbalance. That led to more successes this year.”

Earlier this year, Magnolia reached a proposed agreement to sell a quarter of its capacity to Singapore’s Delta Offshore Energy Pte Ltd. If finalized and a positive FID is made, about 2 million metric tons/year would be supplied to Delta on a free-on-board basis for at least 20 years to fuel a power plant in Vietnam.

China remains “very engaged at a business level” even as “they can’t execute” under the current regulatory environment, Vesey said. China is “a huge buyer, so it’s very important to stay engaged with them as well.”

A huge buyer indeed.

Smith said he expects China to remain a major source of LNG demand growth going forward.

“The growth wedge is going to continue to be in Asia... the ways that demand has diverged from previous forecasts has largely been China, so we think China’s going to continue to be important as an incremental source of demand,” he said.

As for the impact of potential policies to address climate change, Smith said long-term projections on global energy trends show the ratio of natural gas in the energy mix remaining stable.

“There are other things that happen in terms of increased amounts of renewables, wind and solar, less coal,” Smith said. “But the place for natural gas and LNG, most models that we see show there’s going to be an opportunity in the future for this industry.”

Efforts to decarbonize the global economy could be a key for driving demand of LNG, according to Vesey.

“I think the biggest opportunity is coal replacement,” he said. “When you look across Asia, they’ve looked at what we’ve done here in the U.S., and while it’s not a perfect answer, it’s a really good start from an emissions standpoint. So you’re looking at a desire for replacing a lot of coal.”

There will also be opportunities for LNG to supply energy for countries looking to generate more electricity to lift their citizens out of poverty, Vesey said.

On the supply side, the growth in production coming out of the U.S. onshore has opened up new ways of looking at the value chain for Cheniere, according to Smith.

“We see a new supplier push that is changing the way we’re thinking about LNG and moving natural gas, some of these integrated producer push models, where we’re able to go to a producer and give that producer access or exposure to international LNG prices,” the executive said.

This arrangement has the potential to benefit both the producers and the LNG industry, he said.

As for the risks to natural gas posed by anti-fossil fuel policy stances among the 2020 U.S. presidential candidates, Smith said LNG is a “decadal business,” and companies operating in the space will need to remain focused on the long-term trends likely to endure beyond any political cycle.

“We could argue one way or the other what happens” if a particular candidate wins the U.S. presidency, “but over the long run, the fundamental drivers remain the same. The fundamental pressures remain the same,” Smith said. “...We have to think about how we fit into the lower-carbon economy of the future. We have to think about how we emphasize and capture opportunities.”

Smith also emphasized the need for the industry to communicate its role in that lower-carbon future.

“The arrow’s going in one direction in terms of the need to reduce the carbon intensity of the populace. There are, I think, concerns in the current environment about what negative things that might portend,” Smith said. “...It’s important for us to communicate that in a way that’s effective. We’ve got a great story to tell...there will be some challenges domestically, but overall, I think there’s an opportunity for natural gas to ensure it plays a role” in reducing carbon emissions.