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Train 1 startup nears as feedgas ramps up

Startup of the second and third liquefaction trains at Sempra Energy's Cameron LNG export terminal is currently expected in 2020, months later than previously expected, lead construction contractor McDermott International said Monday.

Sempra had said as recently as February that it hoped to have all three trains at the Louisiana facility operational by the end of this year. Natural gas deliveries to the terminal ramped back up in recent days, with production from the first train expected this quarter.

McDermott has faced several construction- and weather-related delays at Cameron LNG and Freeport LNG in Texas. During a conference call with investors to discuss first-quarter financial results, executives said the contractor and its partners have made strides getting the two US projects back on track.

"At Cameron in particular, over the past year, we have taken an active management role in all aspects of the project," CEO David Dickson said. "We have strengthened leadership, oversight, execution, forecasting and reporting. And more recently, we have stepped up further to do more of the heavy lifting in relation to the commissioning activities that began on Train 1 during the fourth quarter."

Initial production of LNG from trains 2 and 3 at Cameron, or startup, is currently set for the first quarter of 2020 and second quarter of 2020, respectively, CFO Stuart Spence said on the call.

A Sempra spokeswoman did not immediately respond to a request for comment.

During a tour of the facility in Hackberry, south of Lake Charles, on February 6, Sempra officials said their goal was to have trains 2 and 3 producing LNG by end-2019. The $10 billion project is a joint venture of affiliates of San Diego-based Sempra, France's Total, Japan's Mitsui and a company jointly owned by Japan's Mitsubishi and NYK.

"We always throw out the caveat that we are in commissioning mode, so we always have to be careful of the unknowns that could occur as we get through the commissioning process," Dickson said.

As many as 11,000 workers were on-site last summer at Cameron LNG as contractors McDermott and Chiyoda pushed to get the project completed.

Cameron LNG began receiving gas deliveries in late March as it started to commission its flare and fuel gas systems. Production from Train 1 is expected to begin within weeks, and eventually the terminal will be ready to ship cargoes.

TEXAS TERMINAL

At Freeport LNG, meanwhile, there have been signs recently of early commissioning work, with gas deliveries appearing to have started last week.

On April 18, Freeport LNG received Federal Energy Regulatory Commission approval to begin the introduction of hazardous fluids and commission the flare pilots and heating medium system. The facility has not yet received FERC approval to introduce feedgas, which would indicate the startup of initial cool-down operations and commissioning of the first liquefaction train. Since the facility is not producing its own power on-site, the recent gas deliveries are likely meant to commission non-liquefaction portions of the facility.

The developer previously said it expected to begin flowing feedgas in April or May, with first LNG ready to load in July.

During the earnings call, McDermott's Spence said Freeport is scheduled for initial production from Train 1 in the third quarter, which would be in line with the most recent timeline provide by the developer. Production from Train 2 is expected to start in the fourth quarter and production from Train 3 is expected to start in the first quarter of 2020, Spence said.

"So with the imminent completion of Cameron Train 1 as expected as well as initial work to commission Freeport Train 1, we're increasingly confident that the two facilities will come fully online in 2020 as world-class LNG plants," Dickson said.

-- Harry Weber, Harry.Weber@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com