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LNG Project Tracker: Cove Point days away; Cheniere nears decision on new train

Dominion Energy Inc.'s Cove Point LNG export terminal is set to come online in early March, after the developer pushed back the in-service date from late 2017. Once online, the Maryland export facility will add 5.25 million tonnes per annum to U.S. LNG export capacity.

Four 4.5-mtpa trains are already in service at Cheniere Energy Inc.'s pioneer Sabine Pass LNG terminal in Louisiana. A fifth train is expected to enter service in 2019, along with two trains at the developer's second LNG terminal in Corpus Christi, Texas. A third train at Corpus Christi could soon receive a final investment decision, after Cheniere signed a deal with a subsidiary of China National Petroleum Corp., the first long-term agreement of its kind with a Chinese company.

Four other LNG export projects are under construction in the U.S., and even more are seeking federal authorization. The following is a compilation of updates to major projects over the last few months.

Sabine Pass: Fifth train ahead of schedule

A fifth liquefaction train at Sabine Pass that is scheduled to enter service in August 2019 is ahead of schedule, according to a Kinder Morgan Inc. unit developing a natural gas pipeline to feed the facility. Kinder Morgan Louisiana Pipeline LLC in November 2017 asked the Federal Energy Regulatory Commission for a quick approval after it heard from Cheniere that train 5 is progressing "more quickly than anticipated. FERC approved the pipeline project days later.

Four liquefaction trains are in service at Sabine Pass. A 20-year contract between Cheniere and GAIL (India) Ltd. for 3.5 mtpa of LNG from train 4 will go into effect in March.

Corpus Christi: Closing in on 3rd train

Cheniere is months away from sanctioning a third liquefaction train at its Corpus Christi LNG export terminal in Texas, executives said on a fourth-quarter 2017 earnings call. The company on Feb. 9 announced that affiliates Corpus Christi Liquefaction LLC and Cheniere Marketing International LLP had signed two contracts with PetroChina International Co. Ltd., a subsidiary of the state-run China National Petroleum Corp.

Along with another contract signed in January with trading company Trafigura Pte. Ltd., the deals make up "enough contracts to commercialize train 3" within the next few months, Cheniere CEO Jack Fusco said on the Feb. 21 call.

Cheniere is also moving forward with a Corpus Christi expansion project, which will now consist of seven smaller trains borrowed from a midscale proposal the company unveiled in November 2016. The design change boosts the project's overall capacity to 9.5 mtpa from the previous 9-mtpa plan.

Cove Point: Days away after delay

The Cove Point LNG terminal could export its first cargo any day, after there was a delay from the project's previous late-2017 expected in-service date. Gas flows at the facility began to climb in mid-February, consistent with the company's announcement that the facility has begun liquefying gas ahead of the new March in-service date.

Cove Point is set to export its first cargo early in the week of March 5, according to a source familiar with the project. On Feb. 27, the Gemmata tanker, owned by a Royal Dutch Shell plc affiliate, was anchored in the Chesapeake Bay 1.5 nautical miles from the site in Lusby, Md., according to ship-tracking website MarineTraffic.com. The vessel is likely to depart Cove Point "early next week," according to the source, who spoke on condition of anonymity because he was not authorized to speak about the matter.

At least two LNG tankers, the Gemmata and the Methane Spirit, had Cove Point listed as their scheduled destination as of Feb. 27, according to MarineTraffic.com. The Methane Spirit is making its way from Japan and should arrive at the terminal March 30. Cargoes frequently change destination midtrip.

Freeport: Taking form after Hurricane Harvey

After analysts speculated that the first of three liquefaction trains at the Freeport LNG terminal could face pressure in its construction schedule, the developer of the Texas project said train 1 is expected to be completed "within a window that ends by early March 2019," with the other two trains coming online later that year.

A group of Freeport LNG Development LP affiliates asked the U.S. Department of Energy for permission to export the equivalent of 782 Bcf of gas over two years, beginning either on the date of the first short-term export or Sept. 1. The developer said this most recent application would apply to short-term exports before and after the project's official in-service date.

Cameron: Eyeing 2019 after settling with contractor

Sempra Energy executives said during a fourth-quarter 2017 earnings call that the company still expects all three liquefaction trains at the Cameron LNG terminal to come online in 2019, within the contingencies estimated in the project budget, after reaching a settlement agreement with the engineering, procurement and construction contractor in December 2017.

In a Dec. 19, 2017, filing with federal regulators, Sempra said the agreement with CCJV, a joint venture between an affiliate of Chicago Bridge & Iron Co. NV and Chiyoda International Corp., waives schedule-related liquidated damages. Sempra had previously expected trains 1, 2 and 3 to come online in mid-2018, late 2018 and mid-2019, respectively.

Elba Island: No major updates

The Kinder Morgan Inc. project is taking form in Georgia after subsidiaries in September 2017 received permission from FERC to install all 10 modular liquefaction trains. Kinder Morgan officials said in a fourth-quarter 2017 earnings presentation that they expect to put the first batch in service in mid-2018, with the rest going online by mid-2019. The developer had said first units would enter service in the second quarter of 2018, with the rest going online by the end of the year.

Magnolia, Lake Charles, Golden Pass, Delfin: Still waiting for decision

Four projects have all major regulatory permits in hand but have not received final investment decisions. As their developers work to sign long-term contracts that help the pricey export ventures to attract financing, the proposed projects did not have any major updates over the quarter.

On the last day of 2017, Delfin Midstream LLC closed on a $25,000 deal to buy a majority stake in idled tech company theglobe.com Inc. for less than a penny per share. A source familiar with the situation said at the time that the Delfin LNG developer was considering going public via reverse merger, a method Tellurian Inc. and NextDecade Corp. have used successfully in the past to access capital markets.

Rio Grande, Texas, Annova LNG: Brownsville projects moving through FERC

Three LNG projects proposed for Brownsville, Texas, continue to progress through the FERC review process. Rio Grande LNG developer NextDecade in early February said it had completed early design work with its contractor, Chicago Bridge & Iron. The developer also said it could move forward with as few as two trains, though it still plans to develop the full six-train design.

Texas LNG on Feb. 26 submitted to FERC the U.S. Coast Guard's recommendation that the Brownsville Ship Channel is suitable for LNG vessels that would dock at the 4-mtpa project. Earlier in the month, the developer told FERC it would develop two roughly 7.4-MMcf LNG storage tanks to be full-containment tanks, instead of the previous single-containment design.

The change came after federal regulators ordered Cheniere to remove from service two single-containment storage tanks following the discovery of an LNG leak from one and a vapor leak from the other. Texas LNG had already been in communication with the U.S. Pipeline and Hazardous Materials Safety Administration about the possible design change.

Driftwood: Gauging interest in pipelines

Tellurian is beginning to seek shippers for its three gas pipelines that would feed southwestern Louisiana, where the 27.6-mtpa Driftwood LNG project would be built. The company in February launched an open season to gauge interest in the 200-mile Haynesville Global Access Pipeline, which, along with the proposed Permian Global Access Pipeline and the Driftwood Pipeline, is estimated to cost about $7 billion and would have a combined capacity of 8 Bcf/d.

Tellurian originally planned to have a final investment decision in 2018, but a scheduling notice from FERC led the company to push back its timeline. Tellurian now expects to commercially sanction the Driftwood project in the first half of 2019.

Alaska LNG: Warning from FERC after touting progress

After answering more than 800 queries from FERC about potential environmental impacts from the $43 billion state-led Alaska LNG project, the Alaska Gasline Development Corp. said in late January that it expected the commission to move forward with its review.

On Feb. 14, FERC told the developer that answers to several questions were outstanding. "Rather than providing specific avoidance and mitigation measures to be adopted or describing potential considerations if the construction schedule cannot be maintained, AGDC has deferred providing information to future plans or the permitting phase," the FERC letter said. The commission gave the developer 20 days from the date of the letter to file a complete response.

Jordan Cove: Hiccups at state level

The Pembina Pipeline Corp.-led Jordan Cove LNG project proposed for Oregon continued to face permitting difficulties at the state and local levels. In November 2017, an Oregon agency that reviews how infrastructure would respond to natural disasters raised concerns over a permit application, which the agency said did not fully address geologic hazards relating to a possible tsunami. Jordan Cove spokesman Michael Hinrichs said at the time that the developer was working with the agency "to make sure they have all the information they need."

Also in November 2017, Oregon's Land Use Board of Appeals sent an approval for the proposed Jordan Cove LNG export project back to county commissioners. The state entity said in its decision that it agreed with environmental groups and Native American tribes that the August 2016 order allowing Jordan Cove to use land in Coos County, Ore., did not fully consider their concerns. Hinrichs has said the decision is not a problem for the project.

In December 2017, Sen. Jeff Merkley, D-Ore., ended his lukewarm support for the project in an opinion article for Medford's Mail Tribune. While he still believes that the massive venture would contribute to the state's economy, he said he had changed his mind about whether "this large-scale fossil fuel project still makes sense."