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Gas flows to Sabine Pass steady as Cheniere pushes out exports; Cove Point review likely to survive appeal

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Gas flows to Sabine Pass steady as Cheniere pushes out exports; Cove Point review likely to survive appeal

Steady pipeline flows to Sabine Pass as Cheniere continues to exportLNG

Naturalgas pipeline flows to Cheniere EnergyInc.'s Louisiana-based LNG export terminal have remained robust throughoutthe past month as additional cargoes have left its docks.

SNL Energypipeline flow data shows that daily deliveries to the Sabine Pass liquefaction facilityfrom the Cheniere Creole Trail PipelineCo. LP and Natural GasPipeline Co. of America LLC systems remained in the mid-600,000 Dthrange after jumping from nearly 210,000 Dth on March 10 to nearly 670,000 Dth onMarch 11. Deliveries for the month peaked March 28 at almost 733,900 Dth, the daythe fourth LNG cargo departed Sabine Pass. Still, the two pipelines used less than50% of their combined capacity on that peak flow day.

Meanwhile,the third LNG cargo left Sabine Pass on March 26, Jefferies LLC analysts wrote ina March 31 note to investors. Cheniere is "obligated to ship 10 commissioncargoes" through the end of April, according to Jefferies.

Q&A: Court 'more likely than not' to uphold FERC's Cove Point LNGreview

The U.S.Court of Appeals for the District of Columbia Circuit is scheduled to hear oralarguments April 19 in a case brought by an environmental coalition alleging thatFERC's environmental review of DominionResources Inc.'s CovePoint LNG LP liquefaction and export project did not comply with theNational Environmental Policy Act.

FERChas denied that its September2014 approval order failed to adequately consider the indirect and cumulative effectsof the liquefaction and export project under the act, including what the EarthReportsInc.-led coalition petitioning the court expects to be more drilling and hydraulicfracturing in the Marcellus and Utica shales. Natural gas trade associations alsodefended FERC's review,but the environmental groups, which also include the Sierra Club and ChesapeakeClimate Action Network, continueto call on the agency to "face the twenty-first century." (D.C. Circuit15-1127, FERC CP13-113)

S&PGlobal Market Intelligence recently spoke with Joseph Fagan, a Day Pitney LLP partnerwith experience representing industry clients in federal regulatory matters, aboutthe Cove Point case and its implications for other U.S. LNG export projects.

Weak global market drives LNG cargoes to New England

LNG shipmentsto New England dropped versus the prior winter but still continued at a healthyrate in spite of a mild winter and low spot natural gas prices as the global marketcontinued to drive cargoes to the region.

FromNovember 2015 through the end of March, LNG sendout to Algonquin Gas Transmission LLC totaled 8.27 Bcf, averaging54,383 Dth/d over the course of the season and reaching a peak of 427,561 Dth onFeb. 13. This winter's total represents a 30.5% decline versus the prior winter,but is 4.1 times and 2.8 times the winter of 2012-2013 and the winter of 2013-2014,respectively.

"Theglobal LNG market has softened substantially year on year," ClipperData directorof commodity research Mickey Kwong said. "Some suppliers have a harder timefinding distant buyers than others. Trinidad, which supplies to Everett, Mass.,is one of them."

HECO plans to use LNG as bridge to completely renewable energy future

The HawaiianElectric Cos. submitted to state utility regulators a vision for achieving 100%renewable energy by 2045. But the HECO utilities said they will shortly seek regulatoryapproval to import LNG for electricity generation as a bridge to a completely greenenergy future.

Their30-year power supply improvement plan update proposes near-term actions to lay thefoundation for reaching the most ambitious renewable energy goal in the nation,said HECO utilities Hawaiian ElectricCo. Inc., Maui ElectricCo. Ltd. and Hawaii ElectricLight Co. Inc.

Yet,the Hawaiian Electric Industries Inc.subsidiaries said they plan to builda combined-cycle, gas-fired plant at the Kahe Generating Station to replace threeoil-fired steam units at the Oahu Island site in 2020. Also, the utilities wantto sign a long-time LNG supply contract and convert a number of existing oil-firedgenerators to burn natural gas.

Record global LNG trade in 2015 boosted by emerging importers

The MiddleEast drove LNG demand growth in 2015 as global trade in the product increased by2.5% to a record 245.2 million tonnes, the International Group of Liquefied NaturalGas Importers said in its annual report.

"LNGimports into the region more than doubled, reaching almost 10 million tonnes atyear-end thanks to new importers Egypt and Jordan," the France-based organizationsaid, noting that those two countries and Pakistan absorbed a combined 5.5 milliontonnes per annum, primarily through spot and short-term deals.

Asia,however, still accounted for 72% of international LNG demand, despite .