PERIODIC UPDATES: U.S. LNG EXPORT AND GLOBAL LNG MARKET - SEMPRA CAMERON LNG UPDATE

NEW YORK  Markets | Mon Nov 9, 2015 5:07pm EST  reuters.com

Cheniere Energy's landmark Sabine Pass liquefied natural gas export plant in Louisiana will receive its first tanker for loading on Jan. 12, according to ship tracking data and a source with knowledge of the plant's operations.

The Energy Atlantic LNG tanker, which was last seen on Thomson Reuters ship tracking data on Monday steaming west across the Indian Ocean, is the first in a string of test cargoes that will be loaded before commercial operations begin later in the year.

The expected arrival of the tanker to Sabine Pass was confirmed by a source and by IHS Waterborne consultants that track LNG shipments globally.

It marks a milestone for the long-awaited project, the first of its kind to be built in the United States in nearly 50 years, and for the U.S. gas market that has been swamped with new supply in recent years due to a domestic drilling boom.

It is unclear when the Energy Atlantic will actually leave Sabine or where it will go.

One source said the test phase could take four to six months before the first shipments under a long term contract between Cheniere and LNG shipper BG Group begin.

The first export shipment represents a turnaround for Cheniere, which in 2008 built an import terminal at the same site in Sabine Pass which was quickly rendered obsolete by the rise in U.S. production.

Now, however, other headwinds exist for exports, including a global glut of supply that has pushed prices way below year-ago levels.

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No Pressure!

If I remember correctly the timeline to regular, significant volumes shipped has gotten longer.  Mid-2016?

"It is unclear when the Energy Atlantic will actually leave Sabine or where it will go.

One source said the test phase could take four to six months before the first shipments under a long term contract between Cheniere and LNG shipper BG Group begin."

maybe it's all phsycoll, er. phsicellog, er, maybe it's all in my head, but I'm glad to hear were getting closer to export.  I don't believe that exports are going to be the "knight in shining armor" for nat gas prices, but any new demand can't hurt. 

Cheap and abundant energy options will change usage and demand over time.  Electrical utilities were reluctant to fully commit to natural gas until the long term supply was dependable and the price became competitive with coal.  We complain about the price of natural gas but the other side of the coin is that usage and demand are on a steady increase.  I think the same will happen with LNG.  It may take the next 5 to 10 years for global LNG markets to sort themselves out and for governments and industry to significantly transition to a reliance on natural gas however that appears to be the future of global energy along with the growth in renewables.

Magnolia LNG, KMI pipe get positive final environmental review from FERC staff

Friday, November 13, 2015 12:10 PM ET

By Allison GoodFERC staff on Nov. 13 issued a positive final environment impact statement for the proposed Magnolia LNG terminal project near Lake Charles, La., and the Lake Charles expansion project proposed by Kinder Morgan Louisiana Pipeline LLC to deliver gas to the export facility.

The report concluded that the projects will comply with National Environmental Policy Act standards if mitigation measures proposed by both companies are implemented.

"We determined that construction and operation of the proposed projects would result in adverse environmental impacts, but impacts would be reduced to less-than-significant levels with the implementation of the applicants' proposed and our recommended mitigation measures," the statement said.

While construction of the LNG terminal would result in the permanent loss of approximately 15 acres of wetlands, for example, Magnolia LNG would actually provide a net increase in wetland acreage through its proposed beneficial use of dredged material.

 

According to the final EIS, the LNG export and pipeline projects would also not be likely to destroy or adversely modify designated critical habitat for the piping plover, a threatened bird.

Magnolia LNG, which would have a 1.08-Bcf/d export capacity, filed an application for FERC authorization in May 2014. The Kinder Morgan Inc. subsidiary applied to FERC for the pipeline expansion in July 2014. According to the draft EIS issued in July 2015, Magnolia anticipates starting construction in early 2016, pending FERC approval, and putting the first of four liquefaction trains into service in December 2018. Kinder Morgan Louisiana Pipeline tentatively expects to begin constructing its facilities in January 2017.

Magnolia LNG is a subsidiary of LNG Ltd. (CP14-347, CP14-511)

 

This is going to be great for the industry

Cheniere’s Louisiana LNG plant inches closer toward exporting after delays

Cheniere Energy Inc’s liquefied natural gas plant at its Sabine Pass terminal in Cameron Parish is reportedly closer to exporting LNG after hitting delays, Bloomberg reports.

Cheniere is ramping up operations of its compressors after a jump in natural gas supplies on Tuesday, a signal that the plant is getting closer to liquefying the fuel for export, according to Genscape Inc.

Genscape’s infrared cameras pointed at the Louisiana plant “saw in real time the increase in activity, with all six of the compressors operating as a result of the large feed-gas supply today,” Jason Lord, an analyst with the data provider in Boulder, Colorado, says in an email to Bloomberg.

Cheniere didn’t immediately respond to a request for comment from Bloomberg.

Cheniere had hoped to be exporting LNG from the plant by now, but said last month it is now hoping to ship out its first exports by late this month or early March. The company cited  “instrumentation issues” discovered during the final phases of plant commissioning and cool-down as the reason for the delay.

Cheniere is in the process of starting to produce LNG to become the first exporter of the fuel from U.S. shale formations.

Gas nominations to the Sabine Pass terminal jumped 64% on Tuesday to 131,108 dekatherms from the previous day, the most since Dec. 27, according to Ventyx data compiled by Bloomberg. The increase was reported on the Creole Trail-SPLIQ-D delivery point. Nominations have been zero at SPLIQ/NGPL delivery point for the past four weeks.

“These sort of feed-gas volumes and quick ramp-up to these large volumes are showing strong progress to the startup process for Train 1,” Lord says, adding he expects to see volumes to continue to climb, reaching 600,000 dekatherms a day, or the equivalent of 600 million cubic feet.

There was also increased flaring activity from the smokestacks at the liquefaction plant, referred to as Train 1, and “when commercial liquefaction has started it is expected that flaring will be minimal unless there is an emergency or planned shutdown,” he says.

Two LNG tankers—the Energy Atlantic and Asia Vision—are waiting in the Gulf of Mexico to take the first cargoes, according to Genscape data.

While Cheniere works to produce its first LNG exports from the Louisiana plant, Bloomberg also recently reported the company is seeking to borrow about $2.6 billion to refinance a pipeline and its underused import LNG facility at Sabine Pass facility.

Williams to pipe gas to Cheniere, Freeport LNG Texas projects

Posted on February 10, 2016 | By Bloomberg

Williams Partners LP, the natural gas pipeline partnership controlled by Williams Cos., said it will deliver dry gas to liquefied natural gas export terminals being constructed by Cheniere Energy Inc. and Freeport LNG Development LP.

Williams has secured the contracts for Gulf Connector, a

475,000 dekatherm-per-day expansion of the Transco pipeline system to connect U.S. natural gas supplies with overseas markets, the Tulsa, Oklahoma-based partnership said in a statement Wednesday.

The arrangements come as U.S. LNG export projects are increasingly under pressure amid the continuing rout in global commodity prices. Liquefied natural gas from the U.S. may be priced out of Asia until 2018 and is “(extremely) borderline for supply to Europe,” Credit Suisse analysts said in a research note Feb. 5. They removed some LNG terminals from a list of possible projects, including a third train at Cheniere’s Corpus Christi, Texas, facility, saying that “very few unsanctioned projects work in the current LNG price environment.”

Gulf Connector will deliver gas for Cheniere’s Corpus Christi liquefaction project and a shipper in Freeport LNG’s liquefaction project near Freeport, Texas, Williams said.

Freeport LNG is controlled by billionaire Michael Smith.

The dry gas will be cooled to minus 256 degrees Fahrenheit (minus 160 Celsius) to shrink it to 1/600th its volume so it can be turned into LNG and shipped aboard ocean-going tankers.

Regulatory approvals are pending for Gulf Connector to add compression and make the natural gas flow bi-directional on a portion of the Transco system between Louisiana and south Texas, Williams said.

Williams also is building the Gulf Trace Project to serve Cheniere’s Sabine Pass LNG export terminal in Cameron Parish, Louisiana. The first cargo from Sabine Pass is expected to be loaded by early March. The Corpus Christi and Freeport projects are currently under construction.

Energy Transfer Equity LP, the Dallas pipeline conglomerate led by billionaire Kelcy Warren, has agreed to buy Williams Cos., which would give it control of publicly traded Williams Partners.

 

I just read an article that they have a ship at the dock and another ship waiting in the gulf. This project needs to get started...

The first tanker has been there since late last year.  Once it goes there should be a queue forming which will be interesting to watch as a barometer of how well Cheniere is finding buyers.

First U.S. shale gas exports imminent as tanker docks at Sabine Pass

By Jacob Gronholt-Pedersen   Mon Feb 22, 2016 8:54am EST

A liquefied natural gas (LNG) tanker on Sunday docked at the Sabine Pass terminal in Louisiana, with only days to go before the United States ships its first export cargo of seaborne gas from the lower 48 states.

U.S. exports will add to a wave of supply coming from Australian projects at a time when demand is faltering in major consuming countries and prices plummeting in line with oil.

Expected to become an importer of LNG just a decade ago, the shale gas revolution in the United States that unlocked cheap, abundant supplies has wreaked havoc on global gas markets as LNG meant for the country was redirected around the world.

Set to load the first shale gas to export markets, the Asia Vision LNG tanker docked at Cheniere Energy's Sabine Pass LNG terminal on Sunday, Reuters ship tracking data showed.

The tanker arrived in January in the Gulf of Mexico, but has been anchored off the coast of the terminal after the first shipment from the facility was delayed due to mechanical problems.

Another tanker, the Energy Atlantic, has also been waiting in the Gulf of Mexico to pick up LNG from Sabine Pass since January.

Cheniere said it expected its first cargo to leave the facility by the end of this month or in early March.

"We will export the first cargo shortly. Touch wood, it'll be at the end of February or in early March," Andrew Walker, Cheniere Energy's vice president for strategy, said during an energy industry event in Germany last week.

The company initially intended Sabine Pass as an LNG import terminal but will draw on shale gas production for exports instead.

AUSTRALIA RAMPS UP EXPORTS

First exports from Sabine Pass comes within days of the world's most expensive LNG plant - the $54 billion Gorgon project in Australia - shipping its first cargo.

"The timing is incredible," said Bernstein analyst Neil Beveridge.

Companies including Chevron Corp, Royal Dutch Shell and Exxon Mobil Corp have invested some $180 billion in seven Australian LNG export plants ramping up production from 2015 to 2017, making the country the top exporter of the fuel ahead of Qatar.

"Sabine Pass will just add to the global oversupply," said Beveridge, although he expects the facility to run below capacity for the time being because of weak demand and low prices.

Four other U.S. projects have already broken ground, including Dominion Resources' Cove Point plant in Maryland expected in 2017, Sempra Energy's Cameron LNG in Louisiana and Freeport LNG's plant in Texas expected in 2018, and Cheniere's Corpus Christi plant in Texas in 2019.

Once operational, Sabine Pass will be the first LNG export terminal outside of Alaska. The United States has been exporting LNG mostly to Japan from Alaska since 1969.

With growth in pipeline exports to Mexico and LNG exports to the world, the United States is expected to transition from a net importer of gas, mostly from Canada, to a net exporter by 2017 as the nation's shale gas production continues to grow, according to federal energy forecasts.

The United States was last a net exporter of gas in 1957.

In 2015, the U.S. exported on average 0.07 billion cubic feet per day from Alaska, according to federal data. That is expected to rise to 0.5 bcfd in 2016 and 1.33 bcfd in 2017 with the startup of the liquefaction units at Sabine Pass and other LNG facilities, according to federal forecasts.

For comparison, the United States produces about 80 bcfd of gas, according to federal data.

 

Petrobras Said to Buy Cheniere's First U.S. Shale Gas Export

Sabrina Valle  Harry Weber   Naureen Malik naurtorious   bloomberg.com

February 23, 2016 — 8:24 AM CST Updated on February 23, 2016 — 3:04 PM CST

  • Shipment to Brazilian energy company agreed to Monday
  • Brazilian LNG imports help meet demand as drought hits

Petroleo Brasileiro SA, Brazil’s state-owned energy company, is scheduled to receive the first cargo of shale gas to be shipped from the U.S., according to a person familiar with the deal.

The shipment of liquefied natural gas was agreed to Monday, said the person, who asked not to be identified because the information isn’t public. Cheniere Energy Inc.began loading the first tanker at its Sabine Pass terminal in Louisiana, U.S. Coast Guard spokesman Dustin Williams said in an e-mail Tuesday.

“The biggest buyer of LNG outside of the winter is Brazil first and Argentina second in the Atlantic Basin," said Ted Michael, an analyst for energy data provider Genscape Inc.“They buy LNG for gas-powered, air-conditioned power."

Cheniere rose 1.5 percent to $30.77 at 3:24 p.m. in New York after earlier gaining as much as 6.5 percent.

America’s first LNG export will hit the water just as global supplies begin to swell, weighing on prices. Other gas-export projects are expected to come under pressure to secure financing and long-term contracts amid the global commodity rout and shifts in demand overseas, Daniel Yergin, vice chairman of the energy consulting group IHS Inc., said in an interview Feb. 17.

Demand is forecast to be higher in South America during the spring, in part due to a drought that has increased Brazil’s dependence on the power-plant fuel. Brazil has increased LNG imports in the past few years after an agreement to buy gas via a pipeline from Bolivia reached its limits. Petrobras bought about 80 LNG cargoes last year. It’s expected to purchase another 50 in 2016, according to Porto Alegre-based Gas Energy consultancy.

Petrobras had no immediate comment on the shipment. Cheniere didn’t respond to an e-mail and voicemail. Initial exports will be considered commissioning cargoes as part of the start-up process to ensure the terminal is fully operational. Once that’s complete, Cheniere will need approval from the Federal Energy Regulatory Commission to operate the export terminal commercially.

Loading the Asia Vision, the LNG tanker that moored at the Sabine Pass on Feb. 21, may take a few days and the timing of its departure is unclear, Williams said. Genscape Inc., which has cameras pointed at the terminal, said the vessel began unloading ballast water shortly after it arrived and has continued to do so, which is “consistent with taking on more weight from LNG loading onto the ship,” analyst Jason Lord said in an e-mail Tuesday. He estimated it may take closer to 36 hours to load the Asia Vision.

Spot Cargo

This is the first so-called spot cargo from the facility, which is still in the commissioning, or start-up, phase. BG Group, a unit of London-based Royal Dutch Shell Plc, will get the first contracted cargo and has agreed to pay about $723 million a year for production capacity once more units come online, Cheniere said in a regulatory filing Feb. 19.

Cheniere’s first cargoes will be launched into a much tougher global gas market. Two years ago, U.S. gas was going for a discount of almost $20 per million Btu versus Japan or Europe and now the difference is just a few dollars. Sabine Pass export volume may average 460 million cubic feet a day this summer as spot and the forward curve signal “there is little demand” for U.S.-based LNG, a Bloomberg New Energy Finance report said Tuesday.

“It’s symbolically significant," Marco Tavares, head of Gas Energy, said by phone from Rio de Janeiro, where Petrobras is based. “For Petrobras, it’s just another import deal, but from now on the U.S. will be a relevant shale gas exporter."

 

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