Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 1, 2016 at 12:46

Over the length of time covered in these contracts the volume will not be enough to move the price needle.  A little over 50% of the gas in the first shipments is sourced from the Marcellus.  The remainder is Gulf Coast (including some Haynesville) and offshore GOM.  When a couple of pipeline projects are completed the bulk of supply will come from the Marcellus.

• ▶ Reply

Permalink Reply by Bradley McWilliams on March 1, 2016 at 13:05

That's certainly true, but it all comes from the same "bucket".  Demand is demand, and I'm glad to see all of it.

• ▶ Reply

Permalink Reply by Steve P on March 4, 2016 at 11:45

You Tube posting of the docking and charging of the LNG tanker at Sabine Pass.

I took a quick look and didn't see this posted on this thread

https://www.youtube.com/watch?v=qydFHzrUnXs

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on March 4, 2016 at 11:48

Now that's cool.  Thanks, Steve.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on March 15, 2016 at 2:57

Cheniere begins initial tests at second plant to export gas

March 14, 2016 5:31 PM

---

By Naureen S. Malik / Bloomberg News

Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana began initial testing of its second plant designed to liquefy natural gas for export by ship, according to Genscape Inc.

Genscape’s infrared cameras aimed at the complex saw “initial commission activity begin at the compressor stacks” for Train 2, as the second liquefaction plant is referred to, on March 11, Jason Lord, LNG analyst for the energy data provider, said in an e-mail Monday. This move came about a week after the company received approval from the Federal Energy Regulatory Commission to introduce fuel gas to the plant.

Cheniere shares rose as much as 2.1 percent on Monday and were up 1.2 percent at $37.44 at 11:13 a.m. in New York.

It can take months to bring equipment online at a liquefaction plant, which chills gas and compresses it to 1/600th of its volume. The testing phase at Train 2 began as Cheniere restarted liquefaction at the first plant to prepare for its second export of shale gas, Mr. Lord said. Train 1, which began its initial startup last fall, is in advanced stages of the commissioning process, and this will include “periodic starts and stops” to demonstrate it can be operated safely and reliability, the company said in a Feb. 29 e-mail.

Cheniere sent out its first cargo of shale gas Feb. 24 on the Asia Vision, which is currently waiting off the coast of an LNG import terminal in Rio. Three days ago a second tanker, the Clean Ocean, arrived at Sabine Pass waiting for the next export. Clean Ocean, which has gas capacity of 3.31 billion cubic feet, is chartered by Cheniere’s marketing arm for one of its contracts, Mr. Lord said.

A spokeswoman for Cheniere did not immediately respond to an e-mail seeking comment.

• ▶ Reply

Permalink Reply by JHH on March 15, 2016 at 7:46

Very good!  Keep the updates coming.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on April 5, 2016 at 4:45

U.S. Taps India as Asia's Debut Buyer of American Shale Gas

Debjit Chakraborty JournoDebjit Anna Shiryaevskaya Harry Weber HarryRWeber

bloomberg.com  April 1, 2016 — 7:26 AM CDT Updated on April 1, 2016 — 11:19 AM CDT

• Spot cargo from Cheniere Energy will reach India mid-April
• Delivered price for Cheniere cargo is about $5 per mmBtu

Gail India Ltd. bought the second shipment of liquefied natural gas from Cheniere Energy Inc.’s Sabine Pass plant in Louisiana in a deal that makes it the first Asian importer of U.S. shale gas.

The nation’s biggest supplier will receive the cargo, bought on spot basis, at the Dabhol import terminal on the country’s west coast by mid-April, Vandana Chanana, a company spokeswoman, said Friday by e-mail. Faith Parker, a spokeswoman at Cheniere in Houston, didn’t immediately respond to a voice mail left outside office hours and an e-mail sent Friday morning.

The deal marks the beginning of U.S. LNG exports into the world’s biggest importing region of the super-chilled fuel, just as regional producers from Australia to Papua New Guinea ramp up supplies. India last year overtook South Korea as the world’s second-biggest importer of the fuel on a spot and short-term basis as buyers took advantage of a slump in prices brought on by the crash in crude oil and an oversupply.

"This is the first and definitely will not be the last shipment to go to India from the U.S. Gulf Coast," Chris Rumley, a senior LNG and natural gas consultant at Poten & Partners, said by telephone from Houston on Friday. "There is terminal capacity in India and if the price is competitive against alternative fuels, then there’s a market there for it."

Higher Price

The delivered price of the cargo is about $5 per million British thermal units, according to two people with direct knowledge of the matter, who asked not to be identified because the information is private. Chanana declined to comment on commercial terms.

That’s higher than the $4.30 per million British thermal units now paid by customers in northeast Asia for spot cargoes, according to assessments by the World Gas Intelligence publication. Prices crashed 78 percent from the peak in February 2014.

The price slump supported demand for spot cargoes in India. Imports rose 45 percent to 9.7 million tons in 2015, the biggest increase in spot and short-term traded volumes last year, according to the International Group of LNG importers annual report published this week. India imported a total of 14.6 million tons of LNG last year, unchanged from a year earlier, according to the group.

Tanker Route

The Clean Ocean LNG tanker left Sabine Pass on March 15 after loading the second export cargo from the terminal. It’s sailing toward South Africa, according to ship-tracking data on Friday.

Some analysts had expected the vessel to go elsewhere, perhaps to South America because of demand there for the power-plant fuel and because of the content of the gas Cheniere was producing.

"We initially thought when it left it would be Rio or Kuwait, because of there being hotter gas, meaning higher ethane and C+ content, in the tanks when they started to liquefy," Jason Lord, LNG analyst for energy data provider Genscape Inc., said by telephone from Boulder, Colorado. "Their regas facilities and grid tend to be able to handle that better in the Atlantic basin. Potentially, this one in India can handle that."

The first batch of LNG from the Cheniere terminal was shipped to Brazil in February, marking the start of U.S. shale gas exports. The third cargo on the GasLog Salem is also set to go to Brazil, while the destination of the fourth shipment on the Energy Atlantic is still unclear, according to the ship-tracking data.

Eight Cargoes

Cheniere plans to ship as many as eight cargoes of LNG from its Sabine Pass project by May, the Houston-based company said in a February notice to the Federal Energy Regulatory Commission.

Cheniere’s initial exports are commissioning cargoes as part of the startup process to ensure the terminal is fully operational. Once that’s complete, Cheniere will need regulatory approval to operate the terminal commercially.

Gail India has agreed to buy 3.5 million metric tons of LNG a year for two decades from Sabine Pass. It has also booked 2.3 million tons a year capacity in the Cove Point LNG liquefaction terminal in Maryland. The shipments are expected to start in 2017 or 2018.

Gail will import around 6 million metric tons of gas from the U.S. from 2018, India’s Oil Minister Dharmendra Pradhan said in an interview in New Delhi on March 28.

 

 

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on April 6, 2016 at 3:00

STEADY PIPELINE FLOWS TO SABINE PASS AS CHENIERE CONTINUES TO EXPORT LNG

By Allison Good  Monday, April 04, 2016 8:26 AM ET  snl.com

Natural gas pipeline flows to Cheniere Energy Inc.'s Louisiana-based LNG export terminal have remained robust throughout the past month as additional cargoes have left its docks. 

SNL Energy pipeline flow data shows that daily deliveries to the Sabine Pass liquefaction facility from the Cheniere Creole Trail Pipeline Co. LP and Natural Gas Pipeline Co. of America LLC systems remained in the mid-600,000 Dth range after jumping from nearly 210,000 Dth on March 10 to nearly 670,000 Dth on March 11. Deliveries for the month peaked on March 28 at almost 733,900 Dth, the day the fourth LNG cargo departed Sabine Pass. Still, the two pipelines used less than 50% of their combined capacity on that peak flow day.

Meanwhile, the third LNG cargo left Sabine Pass on March 26, Jefferies LLC analysts wrote in a March 31 note to investors. Cheniere is "obligated to ship 10 commission cargoes" through the end of April, according to Jefferies.

FERC staff on March 11 authorized Cheniere Energy to export additional LNG cargoes from Sabine Pass as part of commissioning activities. Cheniere exported the first cargo of domestically produced LNG from the Lower 48 on Feb. 24, but the FERC authorization that covered that first cargo did not approve loading and export of any additional LNG.

While the first Sabine Pass cargo went to Brazil's Petrobras, India's GAIL (India) Ltd announced that it purchased the terminal's second shipment. GAIL, which bought the cargo on a spot basis, will receive it at the Dabhol import terminal on the country's west coast by mid-April, spokeswoman Vandana Chanana  told Bloomberg April 1. Petrobras bought the third Sabine Pass cargo, Platts reported March 29.

 

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on April 21, 2016 at 3:00

U.S. Shale Gas Bound for Europe After Leaving Cheniere

Anna Shiryaevskaya  Harry Weber HarryRWeber Joao Lima joaomlima1

April 19, 2016 — 10:54 AM CDT Updated on April 20, 2016 — 1:15 PM CDT bloomberg.com

• Sixth tanker from Sabine Pass plant headed for Portugal
• Asia has become less attractive destination for U.S. LNG

Within a decade of revolutionizing domestic natural gas markets, U.S. LNG produced from shale will for the first time enter Europe, a region dominated by Russian and Norwegian supplies.

Portugal will receive the tanker Creole Spirit, the sixth cargo from Cheniere Energy Inc.’s Sabine Pass facility, according to two people with direct knowledge of the matter. The first left the plant in Louisiana in February.

Europe will become the third continent for U.S. shale gas, which has already turned the country into the world’s biggest gas producer and will make it a net exporter this year, helping contribute to an 18 percent increase in global liquefied natural gas capacity through 2017, according to Bank of America Merrill Lynch. The flexible U.S. volumes, coming after five years of stagnation in global LNG capacity, have already been shipped to Brazil, Argentina and India.

“LNG coming out of the U.S. is probably the single most important thing that will transform the future LNG market,” Melissa Stark, energy managing director and global LNG lead at Accenture, said by e-mail. “It heralds the arrival of a global market.”

The Creole Spirit, which left Sabine Pass on April 15, is now in the Atlantic Ocean headed toward Europe, according to ship-tracking data on Bloomberg. It’s expected to arrive at the port of Sines in Portugal in about a week, one of the people said, asking not to be identified because the information is private. 

Galp Energia SGPS SA, Portugal’s biggest oil company, bought the cargo, the people said. Galp spokeswoman Rita Carvalho declined to comment by e-mail.

Europe’s biggest energy companies, including Centrica Plc and Gas Natural SDG SA, contracted for U.S. LNG, meaning trading will expand once cargoes become regular and commercial. More LNG tankers are being diverted to Europe’s underused terminals and liquid hubs in the northwest after prices in key consuming nations in Asia fell. Net LNG imports to Europe rose 16 percent last year, according to the International Group of LNG Importers.

Portugal relied on LNG imports, mainly from Nigeria, for about a third of its natural gas last year, according to energy grid operator REN-Redes Energeticas Nacionais SA. The rest came by pipelines from Algeria through Spain. The southern European nation boosted LNG imports 13 percent to 1.1 million metric tons last year.

Cheniere estimates shipping costs to Europe at 50 cents a million British thermal units compared with $1.50 to transport fuel to Asia. Spot Asian LNG crashed 72 percent in the past two years amid rising production in Australia and weaker demand in Japan, South Korea and China, the world’s biggest consumers of LNG. That narrowed the price difference between Europe and Asia.

Cheniere gained 2.4 percent to $38 at 1:52 p.m. in New York. The shares are down 51 percent in the past year.

 “U.S. LNG supply to Europe may have strong geopolitical symbolism, but its current volume impact will be negligible, until the big volumes come on stream in 2018-19, and cargoes will probably go to higher value markets in Latin America and elsewhere,” Jonathan Stern, chairman and founder of the natural gas research program at the Oxford Institute for Energy Studies, said by e-mail. 

Russia’s Gazprom PJSC, which is seeking to boost exports to its biggest market by revenue to a record this year, has said U.S. LNG can’t compete on price in Europe and American supplies to the region will be limited. Russia meets a third of European gas supply, with Germany being the biggest market.

More than half of U.S. total LNG production may be destined for Europe by 2020, according to Wood Mackenzie Ltd. Cheniere said in January that it can profitably sell LNG despite lower prices, though margins may be as little as $1 per million Btu to Europe.

 

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on April 29, 2016 at 3:33

A 'GLOBAL BID' FOR US LNG AS SABINE PASS CELEBRATES GRAND OPENING

By Allison Good  Wednesday, April 27, 2016 12:58 PM ET

In Cameron Parish, La., just east of the Texas border, Cheniere Energy Inc.'s $20 billion Sabine Pass LNG liquefaction and export terminal is transforming the U.S. into a natural gas export power.

As a crowd of state and federal government officials, international buyers, and members of the companies that helped build Sabine Pass celebrated the facility's grand opening April 25, Cheniere finished loading its seventh cargo onto the Gaslog Salem LNG tanker, which shipped later that day. Headed for Portugal, the Gaslog Salem was only the second tanker leaving the docks at Sabine Pass to set course for Europe, a surprise to some but indicative of the global demand for U.S. supplies.

"I think most of us at Cheniere thought most of these cargos would be heading to Europe," Neal Shear, Cheniere's interim CEO and president, said during a press briefing at the event. "So far cargos have gone to Argentina, Brazil, to the Middle East to Dubai, and to the Asian continent, which tells me in spite of what a lot of people are saying about the LNG market, there does appear to be a global bid for LNG today that we didn't expect around the time of commissioning, so we feel pretty good about that."

Outside the celebration tent S&P Global Market Intelligence got a close look at the operations and ongoing construction at the terminal. Covering 1,000-plus acres, Sabine Pass plans to build six liquefaction trains with a combined capacity of 4.14 Bcf/d. Exports from the first liquefaction train began in February, and the second train is expected to start production in early May, according to site project controls lead Bo Baggs.

"It is truly massive," he said during the tour. "The scale is just ridiculous."

Baggs is not wrong. After all, each of the facility's liquefaction trains is approximately 1,300 feet long. Powered by General Electric engines, the trains cool the gas Sabine Pass receives from the company's Cheniere Creole Trail Pipeline Co. LP and other regional pipes including the Natural Gas Pipeline Co. of America LLC system to liquid form at minus-260 degrees Fahrenheit. At that point, the LNG is either stored in one of the five massive storage tanks, each able to hold 42 million gallons of LNG, or pumped onto a waiting ship.

Alligators still roam the area, but now tend to stay outside the fence separating Cheniere's facility, Baggs said. To remind guests that reptiles used to be a much larger problem, however, an alligator captured and killed on the project site sits on a podium in the visitors center lobby.

A gamble pays off

There was no guarantee that LNG exports from Sabine Pass would actually materialize. When Cheniere in 2010 formally filed its plans to convert the Sabine Pass LNG import terminal, which had not received a single cargo, to an export facility that would sell American shale gas to international markets, the company's valuation reflected the long odds of the plan. The stock price had plummeted in 2008 and been unable to recover.

A lot has changed since then. Cheniere Energy Partners LP subsidiaries Sabine Pass Liquefaction LLC and Sabine Pass LNG LP began signing firm sale and purchase agreements in 2011, and Cheniere announced the Sabine Pass expansion project in 2014. Cheniere fired co-founder and former CEO Charif Souki in December 2015 due to concerns that his plans for expansion lacked long-term contracts to support additional liquefaction trains.

Cheniere still intends to build all six of trains, five of which have received FERC authorization, with the remaining three approved trains coming online through 2019.

"This is really a new chapter in LNG and LNG trading," Shear said during a speech at the April 25 event. "As we sit here today under this tent, the U.S. is now poised to be one of the top three global LNG suppliers by 2020."

Buying 'energy resources from America'

While only two of the cargos from Sabine Pass were bound for Europe so far, both headed for Portugal, pro-industry congressmen are not concerned that the continent is not immediately reaping the geopolitical benefits of U.S. LNG.

"I think you're going to see the market price go down a little bit at least for Europe," Rep. Randy Weber, R-Texas, told members of the press at Cheniere's event. "I think going forward you're going to see that market loosen up for us. I don't think it's a problem."

Rep. Bill Johnson, R-Ohio, also blamed the U.S. LNG export permitting process. "There is no question that most of … the European Union would much rather buy their energy resources from America, it's just we've kind of slow-walked LNG exports and we're trying to expedite that along," he said.

An end to that regulatory uncertainty, however, may be on the horizon, since Weber, Johnson and Rep. Gene Green, D-Texas, all said they were optimistic a reconciled energy bill would arrive on President Barack Obama's desk by the end of the year. The Senate's version that passed April 20 would require the U.S. Department of Energy to approve LNG export applications no later than 45 days after all required federal environmental reviews are completed for the respective projects, while the House's version passed Dec. 3 narrows that timeline to no later than 30 days after National Environmental Policy Act reviews are concluded.

Gauging the competition

While Shear does not believe all of the LNG export projects proposed for the U.S. will be constructed, he said Cheniere is prepared for competition once permitted facilities under construction begin exporting.

"Cheniere being the first out of the starting block gives us a competitive advantage in a sense," he said. "Going forward, we're going to get more than our fair share of future LNG long-term business that people are turning to the U.S. for."

Shear and Cheniere will not have to look far to keep an eye on other projects in the area. They can see Qatar Petroleum and Exxon Mobil Corp.'s Golden Pass LNG just across the Sabine River in Jefferson County, Texas, from a viewing platform.

 

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on May 9, 2016 at 3:14

Cameron LNG expansion receives FERC authorization

By Allison Good   Thursday, May 05, 2016 4:31 PM ET  snl.com

FERC on May 5 authorized Cameron LNG LLC's 1.41-Bcf/d expansion of its Louisiana natural gas liquefaction and export terminal that is already under construction.

The expansion project in Calcasieu and Cameron parishes, which received a positive environmental assessment from FERC staff in February, would add two trains to the original $10 billion, three-train LNG terminal. The expansion will allow Cameron to export the equivalent of an additional 515 Bcf per year of gas, increasing the terminal's export capability to approximately 1.29 Tcf per year of gas.

Gas for the project would be supplied through an existing interconnection with Cameron Interstate Pipeline LLC and a recently certificated interconnection with Columbia Pipeline Group Inc.'s Columbia Gulf Transmission LLC, according to the May 5 order. The LNG company plans to begin construction in June and to place the project in service by the end of 2019. (CP15-560)

The U.S. Department of Energy in July 2015 authorized Cameron LNG trains 4 and 5 to export LNG to

countries the U.S. has a free trade agreement with, and recently authorized the project to export an additional 0.42 Bcf/d to non-FTA countries.

Cameron LNG is a joint venture owned by affiliates of Sempra Energy; ENGIE, formerly GDF SUEZ SA; Mitsui & Co. Ltd.; and Japan LNG Investments LLC, which is a joint venture of affiliates of Mitsubishi Corp. and Nippon Yusen Kabushiki Kaisha.

Sempra is also developing the proposed Port Arthur LNG export facility in Port Arthur, Texas, which would initially be designed to include two natural gas liquefaction trains with a total export capability of about 10 million tonnes per annum, or 517 Bcf per year.

 

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on May 25, 2016 at 4:52

Cheniere set to export LNG from second Louisiana plant

Daily Report Staff  May 25, 2016  businessreport.com

Cheniere Energy Inc. plans to start exporting liquefied natural gas in August from a second plant at its Sabine Pass terminal in Louisiana.

Bloomberg reports that’s the expected timeframe based on the current progress being made at the facility, a company filing with the Federal Energy Regulatory Commission shows.

Cheniere became the first exporter of U.S. shale gas in February with the start of shipments from the first unit at Sabine Pass. Suppliers of the super-chilled fuel are facing stiff headwinds, as top-consuming Asian countries pull back on demand just as Australia, a major producer, boosts production.

“Actual project progress supports the achievement of substantial completion for Trains 1 and 2 by late May 2016 and September 2016, respectively,” the company says in the filing.

The Sabine Pass LNG terminal is located on over 1,000 acres of land along the Sabine Pass River on the border between Texas and Louisiana, in Cameron Parish.

https://www.businessreport.com/article/cheniere-set-export-lng-seco...

 

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• 4
• Next ›
• Page