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Cheniere's Sabine Pass terminal sees strong winter LNG exports

Houston — US LNG exports are stronger so far this winter compared with a year ago, thanks to global demand and two more production trains in use at Cheniere Energy's Sabine Pass terminal in Louisiana, Platts Analytics' Bentek Energy data showed.

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The figures show the importance of US supplies in meeting peak demand, not only domestically but also in other countries that rely on imports.

A handful of other US export terminals are under construction, while a dozen more have been proposed. Dominion Energy's Cove Point terminal in Maryland has yet to ship its first export cargo.

With the ramp up of Train 3, and the onset of Train 4, feedgas volumes to Sabine Pass have nearly doubled compared with this time a year ago.

Over the course of the winter season thus far, feedgas volumes have averaged 2.9 Bcf/d, getting as high as 3.3 Bcf/d, which represents full utilization of the facility, Platts Analytics data showed.

Since November, 59 ships totaling 204 Bcf of LNG have left Sabine Pass, compared with 28 ships and 91 Bcf of LNG over the same time last year. A Cheniere spokesman declined to comment on the increase in activity.

Global LNG demand has been on the rise, increasing global gas prices and creating favorable netbacks to the US Gulf Coast. This, in turn, has supported the full utilization of Sabine Pass exports.

More specifically, systematic market changes in Asia have continued to increase prices at JKM, pushing netbacks as high as $5.24/MMBtu in late December.

Much of this has been driven by growth in LNG imports in China as the country attempts to battle air pollution, in part, caused by burning coal for home heating.


Developments in the global market support continued strong LNG demand over the next year. Platts Analytics' US LNG feedgas forecast for 2018 is an average of 3.8 Bcf/d -- assuming a February startup of the Cove Point facility -- representing nearly full utilization of US export terminals.

Cove Point had been scheduled to enter commercial service by the end of 2017. Dominion's recent statements suggest the facility will be declared commercial early this year.

In its January 9 Short-Term Energy Outlook, the US Energy Information Administration projected that LNG gross exports will average 3 Bcf/d in 2018, up from 1.9 Bcf/d in 2017, as US liquefaction capacity continues to expand.

The agency said it expects the Cove Point terminal to ramp up to full capacity, and facilities in Georgia and Texas to enter service this year and next year, adding to the surge in activity being seen as Sabine Pass.

"In both 2018 and 2019, the new liquefaction facilities will require a ramp up period, and they are forecast to operate below nameplate capacity for a period of time, lowering the overall LNG export capacity utilization rate," EIA said.

--Harry Weber,
--Liz McFarland,
--Edited by Rocco Canonica,