Attached is a chart that includes information (name, owners, status, etc) for the major LNG export projects in the US. Most of the initial projects are "brownfield" since they involve adding liquefaction facilities to existing LNG import regas termininals that already have ship berths and LNG storage tanks. These brownfield projects already have attached gas pipelines that can be reversed and/or expanded to provide feed gas. Greenfield LNG export projects have virually no existing infrastucture requiring longer construction time.
LNG export projects require a permit from FERC for the new facilities and authorization from DOE for the export of the LNG. Of these two the FERC permit is currently controlling the project schedules. Sabine Pass is the only project that has all the necessary permits, contracts and financing and has been under construction since mid-2012. Cameron is likely to be the next project to obtain all the necessary approvals to start construction.
Although there are numerous proposed LNG export projects only a few are likely to acquire the necessary customer contracts to justify project launch. These projects cost ~ $0.6 to 0.8 billion per MTPA of LNG export capacity.
starting last to first, when they first proposed/built the lng export facility, i feel certain they procured sufficient long term ft to satisfy their lenders. if they haven't relinquished it already, i'm sure the relevant pl(s) would fall all over themselves to allow them to flip the primary receipt and delivery points around for the balance of the agreement(s). and if they have already turned it back, it will easily and cheaply procured. and,as before their bankers may well require it.
fwiw, with respect to s. la short haul ft, i represented one e&p entity which with 5 others developed an offshore project with an estimated peak deliverability of around 1Bcf/d. i want to recall we took about that much long term ft with the interstate we tied into. the agreement provided us with an aggregate firm delivery capacity using their various s. la interstate interconnects. the demand charge was $0.01/MMBtu, again, as i recall.
now, even as large as the sumitomo deal may seem to be, it's small beans in the context of the us natural gas marketplace. our nat gas market is large, efficient, transparent and fungible.
their demand as sizeable as it is will not make them price makers, rather, they will be price takers, just like everybody else.
only in a monopsony can a buyer demand price or other terms.
as an ad absurdum example, let's imagine if michcon, the largest gas utility in michigan, announced to the marketplace that henceforth, they would only buy gas in twenty year chunks and that they would pay, oh, let's say, 1 pound of peach pits per mmbtu. well, we know what would happen, the good citizens of mi would get mighty cold for the ensuing 20 years.
now, if cabot management has agreed to a lt fixed price sale to them. then, they by definition are hedged, the transaction price meets their requirements. it doesn't necessarily make the hedge a good idea, though.
producers are perpetual "longs" and by definition a fixed price sale is a hedge. on the other hand a market is a perpetual "short, any fixed price purchase they make is hedged.
the old saying about there being old pilots and bold pilots, but very few old, bold pilots could apply to those who enter into fixed price deals. index type pricing is the holy grail of all commodity markets.
note: those parties financing $5-!0B projects aren't interested in innovative and novel things. (the worst that ever was said to me while in the army was by my boss "well, jim, that sure is an innovative idea".
gas price "bounding" is easily done if not by contract then by options transactions. it's not new or innovative producers have hedged gas for years by using nymex + basis and , if desired, bounded by puts and calls.
i know cabot, i've done good business with them. they've been around for well over a hundred years. while they might be willing to try new things, i would expect their management would nod in agreement upon hearing the japanese saying "the nail that sticks up, gets hammered down"
do you have details on the cabot/sumi deal terms? is it at cove point or one of the gc facilities? note: if it's cove point, then anything i've said above about their not needing ft goes out the window. the appalachian pls are extremely transport constrained, in other words, there's way more gas there than be transported out. and, as i've said before, buying gas there, now, is like hunting fish in a barrel.
An interesting point on all this is that IMHO, the proposed projects outstrip the economically available gas by some margin. As projects start to get approved and actually start moving forward, both in the US and abroad, we should start to see some of the projects get canceled. Just an indicator to look at, and we may not see it until say 2018.
Next up, I know there are not as many LNG carriers as there are crude tankers, nor is it easy to retrofit ships. It might be interesting to look at the total carrying capacity and what is being built to get a better idea of how many of these facilities can be kept busy.
dbob, all lng tankers are purpose built. they're about as specialized as vessels can be.
i agree with your point vis-a-vis cancellations; it costs nothing (other than pride) to issue a press release to announce another lng export project.
Dbod, only a fraction (+/- 6) of the announced US LNG export projects will actually move forward as the market size is limited. The projects with long term capacity contracts with customers and financing will be the only ones actually constructed. Sabine Pass cleared these hurdles and Cameron, Freeport & Cove Point are the next in line to clear.
Additional LNG carriers will be purchased and constructed as required once projects reach development decision. Customers such as Mitsubishi, Mitsui, BG, etc have LNG carriers under contract but will supplement with new ships based on their overall portfolio of supply and markets.
Here is a vetted list of companies that have announced shale gas related expansion projects dated May 2013, and a link to a 42 page report http://chemistrytoenergy.com/sites/chemistrytoenergy.com/files/shal... :
For an interactive copy of new projects, Send me an email to firstname.lastname@example.org
I didn't see this posted, but here's an interactive map showing different LNG exporting terminals in the pre-permitting, permitting and construction phase.