Cheniere feedgas demand hits 4-month high amid Sabine Pass T6 commissioning

Feedgas deliveries to Cheniere Energy's Sabine Pass liquefaction facility in Louisiana hit their highest level since May after the terminal was given the go-ahead to begin flows to its sixth train as part of commissioning.

With scheduled facility or pipeline maintenance affecting two other export terminals, Sabine Pass and Cheniere's Corpus Christi Liquefaction facility in Texas combined for over 60% of the 10.2 Bcf/d total US feedgas demand Sept. 23, based on nominations for the morning cycle, S&P Global Platts Analytics data showed.

During the Gastech conference in Dubai on Sept. 22, Cheniere's chief commercial officer, Anatol Feygin, told Platts that depending on certain variables, "there's a good chance" Sabine Pass Train 6 will begin production before the end of the year. Construction has been tracking well ahead of schedule, putting Cheniere in position to further benefit from bullish market fundamentals.

Hours after Feygin's comments, US regulators approved Cheniere's request to begin feedgas commissioning of Sabine Pass Train 6.

Once in full operation, Cheniere's ninth overall liquefaction unit across its two terminals will give the biggest US LNG exporter capacity of 45 million mt/year, three times that of its nearest US competitor. Cheniere has said it expects to make a final investment decision in 2022 on a 10 million mt/year expansion using mid-scale units at the site of its Texas facility.

A seventh major US liquefaction terminal, Venture Global LNG's Calcasieu Pass in Louisiana, was nearing completion and was expected to begin production within months, Chief Commercial Officer Tom Earl said Sept. 22 at Gastech.

According to filings with US regulators, Calcasieu Pass has begun early commissioning activities at the facility. It has not yet received approval to flow feedgas to its liquefaction trains; that would be a precursor to beginning production.

Spot prices for deliveries to Asia and Europe have been surging in recent months, as global demand has picked up amid recovering economic growth following the heaviest impacts of the coronavirus pandemic.

Higher netbacks can be beneficial for suppliers that have capacity to ship spot cargoes, beyond volumes that are committed to customers with long-term contracts. For end-users, the surging prices can over time put pressure on demand, affecting decisions by developers of new liquefaction and regasification projects.

Italy's Eni believes the market will stabilize and return to a certain balance, possibly within the next 12 months or less, Mauro Rinaudo, the company's head of LNG business development, Middle East and South America, said Sept. 23 at Gastech.