Cheniere's Sabine Pass prepares for imminent LNG export

Houston (Platts)--11 Jan 2016 519 pm EST/2219 GMT

The US moved one step closer to becoming a global natural gas exporter on Monday as the 160,000 cu m Energy Atlantic LNG carrier began its final approach to Cheniere Energy's Sabine Pass export facility, Platts trade flow software, cFlow showed Monday.

While US LNG exports from Kenai, Alaska, began as early as 1969, Cheniere's newly minted export facility will be the first to send gas produced from the Lower-48 states to consumers across the globe.

Much of the newly available US gas comes from hydraulic fracking that has lifted monthly production by more than 66% over the last decade to an average 2.46 Tcf in October 2015, compared to 1.48 Tcf in October 2005, the most recent EIA data showed.

Early preparations for the commissioning of Cheniere's first liquefaction train began in late September as feedgas deliveries to Creole Trail began ramping up, peaking at 80 MMcf/d on December 20, with deliveries averaging 33 MMcf/d during the final month of 2015.

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The first 2-3 commissioning cargoes from Sabine Pass have already been sold, though the price and destination of those cargoes is still the subject of market speculation. One source estimated the price at Henry Hub plus a $2.00-$2.50/MMBtu liquefaction fee. Possible destinations include Brazil, Lithuania and Dunkirk, sources have said. Cheniere was not immediately available for comment.

Most of the offtake from Cheniere's first liquefaction train at Sabine Pass was sold to BG Group, which agreed in October 2011 to purchased 182.5 million MMBtu/year over a 20-year period at a cost of 115% Henry Hub plus a fixed liquefaction fee of $2.25/MMBtu.

Additional offtakers from Cheniere's Sabine Pass include Spain's Gas Natural Fenosa, Korea's Kogas, India's Gail, French Total and UK's Centrica.

Upon completion, the six-train Sabine Pass export facility will have a total export capacity of 27 million mt/year (1.26 Tcf/year or 35.7 Bcm/year of gas), according to company information from Cheniere.

--Edited by Derek Sands,

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