Cheniere makes feedgas request for Corpus Christi LNG export facility

Cheniere

Cheniere Energy wants to introduce feedgas to the first liquefaction unit at its LNG export facility in Texas as it prepares to begin production before the end of the year.

The Houston-based company has been moving quickly to ramp up its operations amid strong demand and netbacks in Asia and as other US competitors are expected to start their terminals in the months ahead.

Cheniere’s late-Monday filing with the US Federal Energy Regulatory Commission requests permission to be granted by Thursday to introduce feedgas to Train 1. It said Cheniere is ready to begin commissioning of the dry flare. Once in operation, Corpus Christi will be the company’s second LNG export terminal. Its first, at Sabine Pass in Louisiana, began shipping cargoes in February 2016.

With Cheniere and Dominion Energy already producing, US LNG exports are forecast by S&P Global Platts Analytics to surpass 4 Bcf/d this year. With Corpus Christi nearing startup and facilities under construction by several other developers, that total is projected to reach 8 Bcf/d by the end of 2019, Platts Analytics data shows.

Delays at Freeport LNG and Cameron LNG mean the bulk of the new capacity is expected to come online in the second half of next year. Kinder Morgan expects initial in-service at its export terminal at Elba Island near Savannah, Georgia, in the fourth quarter, with final units slated to come online by the third quarter of 2019. One wildcard for the market is what happens with the next crop of US LNG export hopefuls that are part of the so-called second wave of developers. More than a dozen projects are being proposed as part of that group, with startups expected in the early- to mid-2020s. Many have struggled to reach long-term contracts with buyers of their capacity to finance construction.

The escalation of international trade disputes is another wildcard. China said August 3 it may impose 25% tariffs on American cargoes of LNG if President Donald Trump follows through on his threat to expand tariffs on US imports of Chinese goods beyond duties he has already imposed.

LNG tariffs could have considerable short-term and long-term implications for both countries, and for the broader market. China is forecast in the years ahead to overtake Japan as the world’s biggest LNG importer.

GROWTH GOALS

Amid both tailwinds and headwinds, Cheniere is chugging along, with an eye toward growth.

Construction is ahead of schedule at Corpus Christi, where a second train is being built and a third train is planned. Cheniere also plans to add midscale liquefaction units at Corpus Christi and is working to commercialize a sixth liquefaction train at Sabine Pass. Four trains are currently operating at Sabine Pass and a fifth one, like Train 1 at Corpus Christi, is expected to begin producing LNG before the end of the year.

Cheniere’s Midcontinent Supply Header Interstate Pipeline project, which would boost takeaway capacity from Oklahoma’s Anadarko Basin to support growing Gulf Coast demand for LNG exports, received its FERC permit certificate earlier this week. The pipeline has shipper agreements with Devon Energy, Marathon Oil, Gulfport Energy and Cheniere’s Corpus Christi export facility.

Cheniere, which procured steel for the pipeline from a Canadian supplier, is awaiting word on whether it will be granted exemptions from the Trump administration’s move to impose a 25% tariff on imports of steel.

Source: Platts

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