BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR PRIVACY & COOKIE NOTICE
X
HOME > OUR THINKING > Energy > NEWS

LNG project tracker: Cove Point to soon join Sabine Pass in exporting US LNG

Growing LNG exports from Sabine Pass helped the U.S. export more natural gas than it imported in three of the first five months of 2017. With five other projects under construction, the U.S. is set to be able to export more than 9 Bcf/d of LNG by the end of 2019.

Even more U.S. projects and some in Canada await regulatory approvals or final investment decisions. The following is a compilation of major project updates from the second quarter and early third quarter.

Sabine Pass: Making it 'look easy'

Cheniere Energy Inc. said the fourth liquefaction train at Sabine Pass is expected to come online ahead of schedule after it produced its first LNG in July. Executives on an Aug. 8 earnings call said the first commissioning cargo from train 4 is expected "this week."

The U.S. LNG export pioneer has now exported more than 160 cargoes from Sabine Pass to 24 of 40 importing countries, according to Cheniere's second-quarter earnings presentation.

"We have turned into a proven LNG operator and have done so, by and large, without incident and have made it look easy," Cheniere CEO Jack Fusco said on the call. "Certainly, we have encountered our fair share of challenges over the last year, but what we have accomplished is in many instances unprecedented and therefore all the more impressive."

A fifth liquefaction train at Sabine Pass is under construction and expected to enter service in August 2019. Train 6 is fully permitted but does not have a final investment decision. (FERC dockets CP12-507, CP12-508)

Corpus Christi: Working on train 3

Cheniere is still working on a final investment decision for a third train at the Corpus Christi LNG export terminal under construction in Texas.

"We're working Corpus 3," Cheniere Chief Commercial Officer Anatol Feygin said on the earnings call. "There's only one thing on the whiteboard in my office [with] things to do ... and that one thing is FID CC3."

Executives have repeatedly said they think train 3 at Corpus Christi can be the lowest-cost LNG project in the U.S. Train 1 is scheduled to enter service in the first half of 2019, with train 2 coming online later that year. (FERC docket CP12-507)

Cameron: Delayed again

The first liquefaction train at the Cameron LNG export terminal in Louisiana will not enter service until 2019, Sempra Energy announced on its second-quarter earnings call, pushing back the planned timeline by six months.

The delay is the second the developers have announced in the past year. Before a six-month delay announced in November, all three trains at the facility had been expected to be in service by the end of 2018. Analysts largely shrugged at the news, though a couple indicated that severe weather could further delay the project.

Sempra CEO Debra Reed said the company expects new capital projects and strong utility performance to offset earnings in 2018 that would have come from the first two trains.

Executives also said the construction contractor has asked for additional money beyond the amount defined in the lump-sum agreement, though she declined to say how much was requested. Cameron LNG in 2014 awarded a roughly $6 billion engineering, procurement and construction contract to a joint venture between Chicago Bridge & Iron Co. N.V. and Chiyoda Corp. (FERC docket CP13-25)

Cove Point: Commissioning cargoes coming

The Cove Point LNG export terminal under construction at an existing import terminal in Maryland is 95% complete, Dominion Energy Inc. said in second-quarter earnings. Executives on an Aug. 2 call said more than 90% of the project's systems are in the commissioning phase and the project is nearing "essentially complete" status.

The developer has an agreement with a third party for cargoes that will be produced ahead of the project's official in-service date, expected later in 2017. The U.S. Department of Energy in June authorized Cove Point to export up to 250 Bcf of LNG in commissioning cargoes over two years. (FERC docket CP13-113)

Freeport: Letting the juice flow in

Freeport LNG on July 31 received approval from the Federal Energy Regulatory Commission to begin energizing its LNG export terminal under construction on Quintana Island, Texas, bringing the project a step closer to commissioning and a planned startup date in the fourth quarter of 2018.

Freeport continues to await a decision by the U.S. Court of Appeals for the District of Columbia Circuit, after the Sierra Club challenged the U.S. Department of Energy authorization for the Freeport project to export up to 1.8 Bcf/d of natural gas for 20 years. (FERC dockets CP12-509, CP15-518)

Elba Island: Putting the pieces together

The Elba Island LNG export project being built near Savannah, Ga., continues to install modular units that will liquefy natural gas for export. EIG Global Energy Partners is now a partner in the project after Kinder Morgan Inc. sold a 49% stake in Elba Liquefaction Co. LLC. (FERC docket CP14-103)

Delfin: Waiting for one more permit

The offshore Delfin LNG export project needs just one more regulatory approval for the developer to begin work on the liquefaction and export terminal, to include four floating gas liquefaction vessels, each capable of producing 3 mtpa.

The DOE on June 1 authorized the project to export 1.8 Bcf/d of natural gas to non-FTA countries. Delfin LNG CEO Fred Jones said he expects action on the onshore part of the project after new FERC commissioners are sworn in, with a final investment decision planned for 2018.

Later in June, Delfin announced it had teamed up with the Bermuda-based Golar LNG Ltd for the financing, marketing, construction, development and operation of the project. (FERC docket CP15-490)

Golden Pass: Awaiting 'potential' final decision

After receiving its authorization to export LNG to non-FTA countries, the Qatar Petroleum- and Exxon Mobil Corp.-backed Golden Pass project is now awaiting a final investment decision.

"That was really one of the last big significant authorizations we were looking forward [to]," Exxon's Vice President of Investor Relations Jeffrey Woodbury said on a July 28 earnings call.

The DOE's April 25 order was the first such authorization under President Donald Trump and allows the project to export up to 2.21 Bcf/d of natural gas to countries with which the U.S. does not have a free trade agreement. (FERC docket CP14-517)

Magnolia: Taking baby steps

After receiving authorization from FERC in May to begin initial site preparation, the developer of the Magnolia LNG project continues to work toward a final investment decision. Project sponsor LNG Ltd. said in an Aug. 1 news release that it had signed an agreement to deposit dredge spoils on land in Calcasieu Parish, La.

The developer has estimated that a final investment decision could come in late 2017 or in 2018, depending on progress securing agreements with buyers. (FERC docket CP14-347)

Lake Charles: Playing the waiting game

Another project that has all major regulatory permits in hand but does not yet have a final investment decision, the developers of the Lake Charles LNG export terminal continue to weigh how to move forward.

In June, Lake Charles signed a memorandum of understanding with Korea Gas Corp. ESOP to explore joint development of the project, which has stalled as project partner Royal Dutch Shell plc delays a final investment decision amid a global supply glut. Energy Transfer Equity LP CFO Thomas Long said on a second-quarter earnings call that the MOU was a positive step for the project and the developer expects to reach a final investment decision "in the near future as the market continues to tighten."

Minutes after Trump delivered a speech at the DOE in which he touted U.S. LNG exports, the agency authorized Lake Charles to export 0.33 Bcf/d more gas to countries without free trade agreements with the U.S. Lake Charles in July 2016 received approval from the DOE to export the equivalent of about 2 Bcf/d for 20 years to non-FTA countries. Developers then submitted a separate application in August 2016 to export an additional 0.33 Bcf/d "to align the volumes authorized ... with the liquefaction production capacity" approved by FERC.

On an earnings call, Shell CEO Ben van Beurden said the company was weighing how to move forward with both the Lake Charles project and its LNG Canada project proposed for Western Canada. "Can we do two projects at the same time? Yes, we can," he said. "But can we absorb both projects at the same time in the market? We have to think a little bit harder for that. Definitely not exactly at the same time." (FERC docket CP14-120)

Jordan Cove: Boost from the White House

The developer of the only West Coast LNG export proposal in the U.S. got what it asked for when project sponsor Veresen Inc. said it hoped the Trump administration would help Jordan Cove's latest pitch to FERC. Gary Cohn, director of the National Economic Council, gave the White House's first support of LNG exports in April, implying that Jordan Cove would be a priority.

"The first thing we are going to do is ... permit an LNG export facility in the Northwest," Cohn said at the 2017 Institute of International Finance Washington Policy Summit on April 20. "... The one place we are going to permit in the Northwest, it's been turned down twice already."

Jordan Cove, now expected to cost $10 billion, could also be propped up by Pembina Pipeline Corp.'s planned acquisition of Veresen, which company officials say lends balance sheet support for the project.

On July 6, Jordan Cove announced that KBJ, a joint venture partnership comprising Kiewit Energy Group Inc., Black & Veatch Construction Inc. and JGC US Projects LLC, will be the project's engineering and construction contractor. (FERC docket PF17-4)

Alaska LNG: Testing the waters

As Alaska LNG works through the federal approval process, the developer of the proposed liquefaction and export project is gauging market interest in an 800-mile natural gas pipeline that would feed the plant. The Alaska Gasline Development Corp. on June 15 said it has begun soliciting customers for capacity on the line, which would run from a gas treatment plant on the North Slope to the liquefaction plant in Nikiski.

The state agency continues to court buyers for the massive project, estimated to cost between $40 billion and $45 billion, after taking it over from a group of North Slope majors. AGDC, which launched a formal application with FERC in April, said it wants to export the first LNG cargo between 2023 and 2025. The U.S. Army Corps of Engineers temporarily closed AGDC's application to build the pipeline after the developer was unable to provide information within a 30-day response period. (FERC docket PF14-21)

Pacific NorthWest: No longer a go

Malaysian state energy company Petroliam Nasional Bhd. said July 25 that it is dropping plans for the C$36 billion Pacific NorthWest LNG export project proposed for Canada's West Coast, citing challenging market conditions.

"We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision," Anuar Taib, chairman of Pacific NorthWest LNG's board of directors, said in a statement.

Canada's federal government in September 2016 approved the project with 190 legally binding conditions to mitigate environmental impact. Following the approval, aboriginal and environmental groups launched legal challenges that argued the government failed to adequately characterize environmental impacts and consult First Nations.

LNG Canada: Delayed but still possible

Shell is still working toward a final investment decision on its delayed LNG Canada project after the Petronas news.

"I think LNG Canada, I used to say, is the best project in Canada," Shell CEO Ben van Beurden said on the second-quarter earnings call. "I can probably now say it's the only remaining project in Canada."

In May, the developer asked Canada's National Energy Board to push back the required start date for an export license by five years. "Since the letter decision was issued in January 2016, the market for LNG has experienced significant changes," LNG Canada said. "As a result of these factors, which are outside of its control, LNG Canada's ability to advance the commercial and financing aspects of the project has been adversely affected, and the [final investment decision] for the project has been delayed."

Woodfibre LNG: One of Western Canada's last shots

The smaller Woodfibre LNG project is the only export terminal planned for Canada's West Coast that has received the go-ahead from developers, though a start date for construction on the project has not yet been announced.