trending Market Intelligence /marketintelligence/en/news-insights/trending/Ee07AvSF5YxmRDphHq2rbQ2 content esgSubNav
In This List

LNG Project Tracker: 1st cargoes loom at Freeport, Elba Island as US plants rise

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


LNG Project Tracker: 1st cargoes loom at Freeport, Elba Island as US plants rise

The U.S. is on track to have six LNG terminals exporting commercial cargoes by the end of 2019, which would be twice as many facilities connecting domestic natural gas production to world markets as at the beginning of the year.

After a series of delays, Kinder Morgan Inc.'s Elba Island LNG export terminal in Georgia and the Freeport LNG Development LP facility in Texas are both preparing to ship their first cargoes in the weeks amid an ongoing infrastructure buildout that could see U.S. LNG export capacity top 7 Bcf/d by early 2020.

LNG developers seeking to commercially sanction the next generation of U.S. LNG export ventures face challenges. Global LNG prices remained weak, and a trade war between the U.S. and China has created uncertainty for major LNG buyers.

Yet some projects have made progress in recent months. Cheniere Energy Inc. commercially sanctioned a sixth train at its Sabine Pass LNG terminal in Louisiana, as expected. And newcomer Venture Global LNG announced a formal final investment decision on its Calcasieu Pass LNG terminal in Louisiana.

The following is a compilation of updates to major U.S. LNG export projects over the past few months.

Freeport LNG: Preparing to export

Freeport LNG began producing LNG on Aug. 12 and was expected to load the first cargo from the first liquefaction train by the end of August, a spokesperson for the developer said Aug. 19. The production milestone made Freeport LNG, south of Houston, the sixth major U.S. LNG export plant to become operational.

The developer of the terminal was cleared by the Federal Energy Regulatory Commission on Aug. 1 to begin shipping commissioning cargoes as it approaches the start of commercial operations on its first liquefaction train. Freeport spokesperson Heather Browne said Aug. 19 that the first train is on schedule to start commercial operations in September.

The Freeport LNG terminal, which will have three trains before a planned expansion, is expected to be able to produce about 15.3 million tonnes per annum of LNG. Production from the second train was expected to start in the fourth quarter, and production from the third train was expected in the first quarter of 2020.

Elba Island seeks OK to enter commercial service

Kinder Morgan subsidiaries Elba Liquefaction Co. LLC and Southern LNG Co. LLC asked FERC on Aug. 9 for authorization to enter the first of a cluster of small liquefaction trains into commercial service. Kinder Morgan did not specify exactly when the facility would export its first cargo, but the request, which remained pending at press time, suggested it would be soon.

The terminal, which is near Savannah, Ga., will have an LNG production capacity of 2.5 mtpa when all 10 of its modular trains are online. Kinder Morgan executives said the facility was producing LNG in July, which made it the fifth major U.S. LNG export facility to become operational, albeit the smallest.

Cameron LNG begins commercial operations

The Sempra Energy-led Cameron LNG export terminal in Louisiana started commercial operations under the facility's tolling agreements, the company announced Aug. 19.

The second two trains are expected to startup by mid-2020 for an estimated total capacity of 12 mtpa that would complete the $10 billion first phase of the project.

As Cameron LNG ramps up, Sempra also worked to commercialize additional export projects as it pursued a goal of becoming one of the top LNG exporters in North America. Those projects are the Energía Costa Azul terminal on the West Coast of Mexico and the Port Arthur LNG terminal in Texas.

Sempra on Aug. 2 maintained its goal of reaching a final investment decision around the end of 2019 for Energía Costa Azul, which is awaiting an export permit from Mexico.

Sempra did not provide a new timeline for Port Arthur LNG. The company had previously given a final investment decision date in 2020. But that date was marked before the project received a major boost from an agreement with Saudi Aramco, the common name for Saudi Arabian Oil Co., for the state-owned oil giant to pursue a 20-year deal for 5 mtpa of supply from the terminal and make a 25% equity investment in the project's first phase.

SNL Image

Cheniere greenlights Sabine Pass train 6, pursues Corpus Christi expansion

Cheniere Energy Inc. expected to complete a second train at its Corpus Christi LNG terminal in Texas during the third quarter, after shipping the first commissioning cargo in mid-2019. Construction is also more than 60% complete on a third train, according to the company.

Cheniere, the biggest U.S. LNG exporter, announced the final investment decision for train 6 at the Sabine Pass LNG terminal in Louisiana on June 3. Train 6 was not fully contracted, but Cheniere expected to strike a deal with another creditworthy buyer to support the train.

At the same time, the company announced an agreement with Apache Corp. that marked a new kind of gas supply agreement for the U.S. LNG sector. The agreement used a model that exposes the upstream developer to global price risk, which has usually been borne at the LNG buyer level. Cheniere executives said in August that the company is continuing to pursue more deals that use this model.

As it stands, Cheniere planned to use the Apache deal to help secure financing for the company's Stage 3 expansion at Corpus Christi LNG, a project that involves the construction of up to seven midscale liquefaction trains that the company hopes to commercially sanction in 2020.

Each of the seven trains in operation between Cheniere's two terminals has the capacity to produce 4.5 mtpa of LNG, or about 0.7 Bcf/d of gas.

Calcasieu Pass LNG gets final investment decision

Venture Global LNG announced a formal final investment decision to build its Calcasieu Pass LNG export project in an update to an Aug. 19 news release.

The privately held company said a group of 13 institutions, including mainstream lenders for LNG projects, would provide $5.8 billion in construction financing for Calcasieu Pass and the associated TransCameron pipeline. The financing will augment a $1.3 billion equity investment from the private equity firm Stonepeak Infrastructure Partners.

The Calcasieu Pass facility in Cameron Parish, La., would be capable of producing 10 mtpa of LNG.

In June, Venture Global said it raised $675 million from undisclosed investors. The funds would be used primarily for further development of the company's proposed Plaquemines LNG export facility in Louisiana with a production capacity of 20 mtpa.

Another proposed project in Louisiana, Delta LNG, would have a production capacity of 20 mtpa. The developers estimated they would file a formal application with FERC in November.

SNL Image

Golden Pass: Construction starts

Developers of the more than $10 billion Golden Pass LNG terminal in Sabine Pass, Texas, told FERC in recent filings that site work continues on the project. The 16 mtpa project was commercially sanctioned in February by majority owner Qatar Petroleum and partner Exxon Mobil Corp. It is expected to start up in 2024.

Tellurian works to finalize partner agreements for Driftwood

Tellurian Inc. is still working to finalize deals with equity investors as it seeks to commercially sanction the approximately 27.6-mtpa Driftwood LNG project in Louisiana. In July, the company finalized an agreement with Total SA for the French supermajor to significantly raise its stake in Driftwood.

Brownsville projects hold for FERC approval

Three export terminals that could go up around the same time near Brownsville, Texas, are waiting for final approval from FERC. The developers continue to work to build commercial support for the projects. NextDecade Corp.'s proposed Rio Grande LNG would include six trains capable of producing a total of 27 mtpa of LNG. Exelon Corp.'s Annova LNG terminal and Texas LNG LLC's facility are smaller, at 6 mtpa and up to 4 mtpa, respectively.

NextDecade, which landed its first long-term supply deal in April with Royal Dutch Shell PLC, said in an August investor presentation that it planned to decide whether to advance Rio Grande LNG in the fourth quarter, a delay of up to a few months.

Magnolia, Lake Charles and Delfin projects wait for investment

The Magnolia, Lake Charles and Delfin LNG projects have all major permits in hand but have not received final investment decisions. Their developers continue to work to sign long-term contracts that will help attract financing.

Alaska LNG: State shift leaves project in doubt

Alaskan officials announced a decision in July to cut back staff at the state-run company that is developing a massive LNG terminal and gas transportation project and shift the company's focus to only permitting. The decision amounted to an acknowledgment that the state-run company Alaska Gasline Development Corporation no longer plans to work to commercialize the gas export venture or manage it in the long term.

The Alaska LNG project faces the same challenges it has for years: permitting obstacles, a lack of customers and an estimated cost of $43 billion that is significantly higher than rival North American LNG export projects.

Jordan Cove: Permitting challenges remain

Canada's Pembina Pipeline Corp. said Aug. 1 that a water permit tied to its proposed Jordan Cove LNG export terminal that Oregon regulators rejected in May is a critical piece of the effort to make the project commercially viable. Before the Oregon decision, Pembina delayed by up to a year the expected startup of the export terminal and affiliated Pacific Connector feedgas pipeline, as the company limited spending on the project, which has faced a range of permitting challenges.