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Nearly 60% of LNG from Sabine Pass was traded on spot market in 2017, EIA says

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Nearly 60% of LNG from Sabine Pass was traded on spot market in 2017, EIA says

Almost 60% of the LNG produced at Cheniere Energy Inc.'s Sabine Pass export terminal was sold on a spot basis in 2017, according to data from the U.S. Energy Information Administration.

Although Cheniere has long-term contracts for nearly all of the capacity at Sabine Pass, destination flexibility in those agreements allows customers to ship cargoes to different markets in response to demand. Cheniere can also sell LNG directly into the spot market itself via its marketing arm, Cheniere Marketing Ltd. In 2017, with three of Cheniere's long-term contracts in effect, LNG from Sabine Pass landed in 25 countries.

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More than half of total volumes produced at Sabine Pass in 2017 went to Mexico, China and South Korea. Of those countries, only South Korea has a 20-year contract for LNG from Sabine Pass. Mexico was the largest home for U.S. LNG, due in part to rising gas demand in the country and delays in the construction of domestic pipelines that connect to U.S. export pipes, the EIA said in its March 27 "Today in Energy" feature.

U.S. LNG exports in 2017 averaged 1.94 Bcf/d, up from 0.5 Bcf/d in 2016, when just two liquefaction trains were in service for a portion of the year. A fourth liquefaction train at the Sabine Pass terminal reached substantial completion in October 2017. Total U.S. LNG exports to date have likely crossed the 1 Tcf threshold, according to information from the U.S. Department of Energy and pipeline flow data.

The U.S. is projected to become the third-largest LNG exporter in the world by 2020, after Australia and Qatar. In addition to Dominion Energy Inc.'s Cove Point export facility in Maryland, which shipped its first cargo March 1, four other LNG terminals are expected to bring total U.S. LNG export capacity to 9.6 Bcf/d by the end of 2019, the EIA said.