The first natural gas liquefaction train at the Cameron LNG LLC export terminal in Louisiana will likely remain at 65% to 70% of its operational capacity until November following a compressor failure last month, executives for the joint venture partners Total SA and Sempra Energy said Sept. 19.
Details about the glitch, which the executives said has not prevented the facility from meeting its contracts and lifting schedules, came as the annual Gastech conference was wrapping up in Houston. Project developers and buyers tried to make deals at the weeklong gathering to support additional global gas supply that will meet demand early in the next decade.
Both San Diego-based Sempra and France's Total, which are partners in Cameron LNG but competitors on other projects, have big ambitions in the North American LNG sector. They have pinned their goals to cheap feedgas options in the U.S. and growing consumption in Asia, Europe, the Middle East and Latin America.
"You need to be integrated on the LNG chain, and you need to be global," Total's senior vice president of gas, Laurent Vivier, said at a briefing with a group of reporters.
The startup at Cameron has been the most recent opportunity for Total and Sempra to do just that. Production from train 1 began May 14, and the first commissioning cargo shipped a little over two weeks later.
Since then, six more cargoes have been exported. The problem began with the GE-built compressor after commercial service under long-term contracts started August 19, according to Jean-Charles Papeians, Total's head of liquefaction. He estimated that the problem should be resolved and output should approach normal levels in November.
In an interview at the conference, Justin Bird, president of Sempra's LNG unit, said the problem was an electrical issue that affected output. Only two cargoes have shipped from the facility since the problem was identified, according to Platts cFlow vessel-tracking software.
"Baker Hughes and GE have been responsive," Bird said. "We expect those issues to be resolved." Bird said train 1 continued to produce cargoes on schedule, and construction of trains 2 and 3 remains on schedule.
The $10 billion Cameron project — a joint venture of affiliates of Sempra, Total, Japan's Mitsui & Co. Ltd., and a company jointly owned by Japan's Mitsubishi Corp. and Nippon Yusen Kabushiki Kaisha — faced delays before startup.
Growth ambitions
Beyond Cameron, majority owner Sempra has proposed to build LNG export facilities in Port Arthur, Texas, and at the Energia Costa Azul receiving terminal in Baja California, Mexico.
Sempra reached a preliminary deal with Saudi Arabian Oil Co., also known as Saudi Aramco, in May that calls for the state-run oil company to take a 25% stake in the Port Arthur project. Sempra had already reached preliminary agreements with off-takers that, if finalized, would cover all of the liquefaction capacity for the first phase of the export project at Energia Costa Azul. The heads of agreement were with affiliates of Total and Mitsui and Tokyo Gas Co. Ltd.
Both sets of deals need to be finalized. Sempra expects to make a final investment decision on the Mexico project first, probably by the end of the year, followed by a final investment decision on the Texas project around the middle of 2020, Bird said.
Total, meanwhile, wants to be the biggest portfolio player in the LNG market in North America. It was a foundation customer at Cheniere Energy Inc.'s Sabine Pass terminal in Louisiana. It also has off-take commitments at the Freeport LNG Development LP in Texas, and earlier this year, it took an equity investment in Tellurian Inc.'s proposed Driftwood LNG project in Louisiana.
Geopolitical risks
Vivier said Total does not view the U.S.-China trade war as a deterrent to its current slate of liquefaction commitments in the U.S.
"Are we in favor of open discussions and not trade barriers? Yes," Vivier said. "A group like Total has a view which is about trade flows not hampered or made more difficult by conflicts like the trade war. How do we mitigate this? It's by scale."
As for Total's appetite for further LNG growth in the U.S., Vivier said, "I do feel we are happy today with the share of U.S. LNG we have in our portfolio."
Harry Weber is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.
