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US on track to become world’s 3rd largest LNG exporter
As demand for natural gas grows rapidly around the world, the U.S is on track to become the third largest liquified natural gas (LNG) exporter in the world in 2019, behind Qatar and Australia, while U.S. exports will more than double by 2025.
Production at Cheniere Energy’s Sabine Pass LNG in Louisiana and Corpus Christi LNG in Texas, along with Dominion Energy’s Cove Point in Maryland quickly turned the U.S. into the world's fourth largest LNG exporter by the end of 2018, behind Qatar, Australia and Malaysia.
Meanwhile, the first liquefaction train at the $10 billion Cameron LNG export terminal in Louisiana started producing LNG this week, the company said on May 14.
Cameron LNG is the fourth LNG export plant to come online in the Lower 48 states in the U.S. and the third liquefaction plant in the U.S. Gulf, after Cheniere’s Sabine Pass and Corpus Christi plants.
The U.S. is now the fourth-largest LNG exporter, producing 25.3 mtpa in the last 12-month period, after Qatar, Australia and Malaysia, according to LNG Edge.
The U.S. is the third-largest exporter in year-to-date exports starting in January 2019, according to ICIS.
"There is now 41.25 mtpa of nameplate capacity in operation in the U.S., from the first five trains of Sabine Pass, the first train at Corpus Christi and the single-train plant in Cove Point. This number excludes the first 4.5 mtpa of Cameron LNG, which is still considered to be commissioning," said Ruth Liao, Editor LNG Americas for ICIS.
"U.S. LNG is expected to more than double in the next few years, considering all the sanctioned projects due to come online between now and 2025," Liao said. "These include the first three trains of Cameron LNG, trains 2 and 3 at Corpus Christi, the 10 mid-scale trains at the 2.5 mtpa Elba LNG project and the first three trains at Golden Pass, with an aggregate of 54.5 mtpa to be added."
Looking at all the plants under construction and a billion cubic feet/day measurement, U.S. LNG export capacity is expected to rise to 7.4 billion cubic feet per day (bcfd) by the end of 2019 and 10.0 bcfd in 2020, from around 5.2 bcfd now, according to Reuters.
By the end of 2019’s third quarter, the number of domestic liquefaction facilities in operation is set to double from three to six with the addition of Freeport LNG, Sempra Energy's Cameron LNG in Louisiana and Kinder Morgan's Elba Liquefaction in Georgia.
The Cameron LNG project in Louisiana has achieved first LNG production from train 1 this week, the company said. The project will begin exports in the coming weeks.
Total entered the Cameron LNG project through the acquisition of Engie’s upstream LNG business in 2018. Phase 1 of the Cameron LNG project of 13.5 mtpa capacity includes three LNG trains of 4.5 mtpa each.
Construction is ongoing for trains 2 and 3 with first production expected by the turn of the year and mid-2020 respectively.
McDermott International and Chiyoda are the lead contractors on the Cameron project.
“The start-up of the LNG production marks an important milestone for the Cameron LNG project. Total’s commitment to Cameron LNG and its expansion is in line with our strategy to continue building a strong position in the U.S. LNG market,” Patrick Pouyanné, Chairman & Chief Executive Officer of Total said in a statement.
The project is operated by Cameron LNG LLC, jointly owned by Sempra Energy (50.2%), Total (16.6%), Mitsui & Co., Ltd. (16.6%) and Mitsubishi/NYK (16.6%).
“With Cameron LNG start-up, we will achieve our target of being integrated along the gas value chain in the U.S. since we are already a gas producer in the country,” Pouyanné said.
Sempra has a long-term goal of exporting 45 mtpa of North American LNG and is developing a second two-train phase at Cameron, the Port Arthur LNG export terminal in Texas, and plans to add export facilities in two phases at its existing Costa Azul LNG import terminal in Baja California in Mexico.
Cheniere Energy Sabine Pass in Louisiana
Cheniere Energy Partners is developing, constructing and operating a liquefaction project at the Sabine Pass LNG terminal adjacent to the existing regasification facilities for up to six trains, with expected nominal production capacity of approximately 27.0 mtpa of LNG.
Trains 1-4 have achieved substantial completion. Construction commenced on Train 5 in June 2015. All regulatory approvals have been received to construct and operate Train 6, and a final investment decision (FID) is expected to be reached upon obtaining commercial contracts and financing enough to support construction, the company said.
The Sabine Pass site can readily accommodate up to six liquefaction trains capable of processing over 3.5 bcfd of natural gas. The production capacity of each LNG train is being designed for approximately 4.5 mtpa.
Sabine Pass Liquefaction will have access to the existing infrastructure, including five storage tanks and two berths at the Sabine Pass terminal, as well as Cheniere Partner’s 94-mile Creole Trail Pipeline, which was reconfigured to reverse the flow of natural gas, making it a bi-directional pipeline.
Cheniere Energy’s Corpus Christi LNG in Texas
Cheniere Energy, Corpus Christi LNG, is developing and constructing an LNG export terminal at one of Cheniere's existing sites that was previously permitted for a regasification terminal.
The liquefaction project is being designed for three trains with expected aggregate nominal production capacity of up to 13.5 mtpa of LNG. Up to seven midscale liquefaction trains adjacent to the CCL Project (Corpus Christi Stage 3) are also being developed. The total expected nominal production capacity of the seven midscale trains is approximately 9.5 mtpa of LNG.
Cheniere made an FID and issued the notice to proceed to commence construction on the first two liquefaction trains on May 13, 2015 and is continuing to market nominal production capacity from Train 3.
To date, 8.42 mtpa has been contracted to third party, foundation customers on a long-term FOB basis under sale and purchase agreements (SPAs). Foundation customers include Pertamina, Endesa, Iberdrola, Gas Natural Fenosa, Woodside, EDF and EDP.
Trains 1&2 are fully contracted and Train 3 is partially contracted. Any excess capacity not sold under long-term SPAs to foundation customers is available for Cheniere Marketing.
The Corpus Christi site is located on the La Quinta Channel on the northeast side of Corpus Christi Bay in San Patricio County, Texas, on over 1,000 acres owned or controlled by Cheniere and is approximately 15 nautical miles from the coast.
Unlike other U.S. LNG projects, Cheniere Energy will procure the natural gas supply used for feedstock. Once the natural gas is liquefied, the customer takes delivery at the tailgate of the terminal.
As a result, Cheniere Energy is expected to become one of the largest buyers of natural gas in the U.S. once all the trains are operational.
Dominion Energy Cove Point in Maryland
Cove Point launched its first LNG export cargo in March 2016. That shipment, a commissioning cargo, eventually made its way to England.
The Cove Point LNG Terminal has a storage capacity of 14.6 bcf and a daily send-out capacity of 1.8 bcf. The terminal connects, via its own pipeline, to the major Mid-Atlantic gas transmission systems of Transcontinental Gas Pipeline, Columbia Gas Transmission and Dominion Energy Transmission.
Dominion Energy Cove Point Terminal is located on the Chesapeake Bay in Lusby, Maryland, south of Baltimore. Historically, the facility has received transport vessels, stored LNG onshore, then transformed it back to gas when needed to meet demand.
The Cove Point Liquefaction Project allows Dominion Energy to liquefy natural gas onsite and transport it to tanker ships for export.
Freeport LNG this week selected KBR for the EPC contract for Train 4 at its LNG export facility in Brazoria County, Texas.
KBR will provide the engineering, procurement, construction, commissioning and startup of a nominal 5 mtpa LNG train and associated gas pre-treatment plant under the anticipated EPC contract.
The company added that it was selected following a nine-month front-end engineering and design (FEED) verification, execution planning and EPC proposal process.
The company is adding a fourth liquefaction train adjacent to the first three trains at its facility on Quintana Island in Brazoria County, Texas. The new 5 mtpa Train 4 will raise the facility’s total LNG export capacity to 20 mtpa.
The first of three LNG production units at the facility began the startup process this week, while the other two remain under construction.
The Federal Energy Regulatory Commission (FERC) is expected vote later this week about issuing a permit for a fourth production unit at the facility.
KBR anticipates a full notice to proceed for the Train 4 project before the second half of this year.
Kinder Morgan's Elba Liquefaction in Georgia
Elba Liquefaction Company (ELC) and Southern LNG Company (SLNG) are constructing a two-phased project called the Elba Liquefaction Project, which will add liquefaction and export capability to SLNG’s existing LNG terminal located at Elba Island in Chatham County, Georgia (Elba Terminal).
On June 1, 2016, FERC granted the project authorizations. Construction on the $2 billion project began on November 1, 2016.
Kinder Morgan continues to make progress on the commissioning and start up process of its Elba Liquefaction Project. Upon in service of the first unit, 70% of the revenue associated with this project will be recognized. The in-service date of the remaining nine units is expected to follow sequentially with one each month after the other.
On Feb. 28, 2017, Kinder Morgan announced that investment funds managed by EIG Global Energy Partners (EIG) have become a 49% joint venture participant in ELC, which will own 10 liquefaction units and other ancillary equipment to be constructed as part of the Elba Liquefaction Project at Kinder Morgan’s existing Southern LNG Company, Elba Island LNG facility near Savannah, Georgia.
In 2012, the project received authorization from the Department of Energy to export to Free Trade Agreement (FTA) countries. An application to export to non-FTA countries was approved on December 16, 2016.
Under full development, the Elba Liquefaction Project is expected to have a total capacity of approximately 2.5 million tonnes per year of LNG for export, which is equivalent to approximately 350,000 Mcf per day of natural gas.
By Heather McGuire Doyle