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US LNG capacity to soon hit 9 Bcf/d; Middle East strife may impact LNG market


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US LNG capacity to soon hit 9 Bcf/d; Middle East strife may impact LNG market

Here comes the boom: 9 Bcf/d of LNG capacity to hit US market by end of 2019

When it comes to U.S. exports of super-cooled natural gas, all eyes have been on Cheniere Energy Inc.'s Sabine Pass LNG terminal in Louisiana. But American LNG exports are just just getting started.

Six projects under construction are poised to bring online the equivalent of more than 9 Bcf/d of LNG production capacity by the end of 2019 — nearly five times what the U.S. is capable of exporting now. That wave of capacity is coming as the global market is working through a supply glut spurred in part from massive volumes coming out of export giants Qatar and Australia.

Since shipping its first cargo in February 2016, Sabine Pass had exported a total of 330 Bcf through March. A fourth liquefaction train expected to enter service in November will bring the terminal's LNG production capacity to roughly 18 million tonnes per annum, or about 2.4 Bcf/d when using the U.S. Energy Information Administration's conversion method.

As Arab states cut ties with LNG titan Qatar, US exports could see boost

U.S. LNG exports could stand to benefit from a group of Middle Eastern countries' decision to cut diplomatic ties with Qatar, potentially making supplies from the world's largest LNG exporter more expensive and leading buyers to diversify their portfolios away from a country that may be perceived as increasingly risky.

Saudi Arabia, Egypt, United Arab Emirates and Bahrain cut relations with Qatar in a coordinated move. Yemen, Libya's eastern-based government and the Maldives joined in later. Qatar in 2016 accounted for roughly 30% of global LNG trade, according to the International Gas Union.

While it is not yet clear how the move will affect Qatar's ability to ship LNG, any disruption would likely lift global LNG prices, which have stayed low amid a supply glut. "In the scenario, all exporters that are exposed to liquid pricing would benefit," said Nikos Tsafos, an LNG consultant and co-founder of the research firm Enalytica. Off-takers of U.S. LNG, which is linked to Henry Hub and would be more attractive amid higher global prices, would then stand to gain, he said.

Poland, dependent on Russian gas, touts 1st US LNG cargo as 'turning point'

Poland is set to receive its first cargo of U.S. LNG, a "turning point" in the country's move to lessen its dependence on Russian gas, Polish officials said in Washington, D.C.

Proponents of U.S. LNG exports have promoted shipments across the Atlantic as a way to diversify Europe's gas supply away from Russia's state-owned Gazprom since before Cheniere Energy Inc. stepped onto the scene with its Sabine Pass LNG export terminal in Louisiana. From February 2016 to March 2017, the equivalent of 27 Bcf of U.S. gas from the terminal landed in Italy, Spain and Portugal. Poland expects to receive its first cargo June 8, and another shipment is on its way to the Netherlands.

Piotr Naimski, a Polish government official who leads the prime minister's energy infrastructure initiative, said the Kaczynski LNG terminal is an important part of Poland's energy diversification strategy and receiving the first cargo of U.S. LNG is a "milestone" for the country. "We are almost 100% dependent on gas imports from Gazprom," Naimski said at a June 7 event in Washington hosted by the Atlantic Council. "I believe that now we are on the verge of success. It's a turning point."

New England energy woes require 'triad' of pipes, LNG, alternative fuels

To solve some of New England's energy woes, pipelines, LNG importers and power generators need to stop fighting one another, according to one energy industry veteran.

"So far the three sectors seem to be fighting with each other all the time, saying 'we can do it if the other guys just go away,'" said Rick Smead, managing director at the analytics and consulting firm RBN Energy LLC. "And that's got to stop."

Smead said each of the three has issues. Pipeline expansion projects have to be the right size to get more gas into the region in winter without being too big or too expensive when considering year-round needs. Oil can only be used as an alternate fuel in limited quantities before it runs into air quality standards and logistical problems getting it where it needs to be. And LNG is expensive to buy on the international market and store for a long time.

Delfin LNG deepwater port receives DOE authorization to export widely

The offshore Delfin LNG export project has received authorization from the U.S. Department of Energy to export 1.8 Bcf/d of natural gas to countries that do not have a free trade agreement with the U.S.

The Energy Department has now approved 21 Bcf/d of natural gas exports to nonfree trade agreement countries, according to a June 1 statement.

"I am pleased that with this authorization the administration can continue to strengthen the United States as a dominant energy force with further exports of our abundant amounts of natural gas," said Energy Secretary Rick Perry, who is in Tokyo as part of a trip to meet Asian leaders. "Investing in American natural gas not only helps our economy and our jobs, but also helps our allies maintain their energy security. This represents a true win-win for everyone involved."

TC PipeLines affiliate working on expansion to help New England gas supply

Portland Natural Gas Transmission System LP is finalizing shippers for an expansion project at a time when pipeline-constrained New England is eager for additional gas supply options, an executive said June 6.

TC PipeLines LP-operated PNGTS is a relatively small but important conduit for gas into New England, with firm capacity of 210 MMcf/d. The planned Portland XPress expansion project potentially could expand the system by 200 MMcf/d, with additions built in phases and some existing capacity turned back by existing shippers for the project, Cynthia Armstrong, PNGTS' director of marketing and business development, said at the LDC Gas Forums Northeast conference in Boston. Armstrong said the targeted in-service date for the project is November 2020.