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Analysis: US LNG export demand faces steep ramp up

Highlights

LNG feedgas consumption to grow 3.7 Bcf/d by Q4 2019

Corpus Christi T1, Sabine Pass Train 5 could begin exports by Q1 2019

Denver, CO — Natural gas demand from US LNG export terminals is set to double over the next year as a spate of new liquefaction projects now nearing completion enters service.

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By September 2019, the startup of Elba Island Trains 1-10, Sabine Pass Train 5, Corpus Christi Trains 1-2, Cameron Train 1 and Freeport Train 1 will add a combined 3.7 Bcf/d in new liquefaction capacity, according to a forecast published by S&P Global Platts Analytics. As early as next month, initial feedgas demand from Elba Island Trains 1-6 could come online, eventually ramping up to approximately 210 MMcf/d. The company's full 10-Train Moveable Modular Liquefaction System or MMLS would consume just 350 MMcf/d upon completion, making it the smallest of the first-wave US LNG liquefaction projects.

Following an early July order from the US Federal Energy Regulatory Commission authorizing the introduction of fuel gas at Cheniere Energy's Corpus Christi Train 1, Texas' first LNG liquefaction facility could be the next in line to begin exporting, with commissioning cargoes expected by first-quarter 2019.

Based on Cheniere's previous timeline from fuel-gas authorization to initial feedgas deliveries, which averaged roughly 120 days at Sabine Pass, it is possible that the Corpus Christi terminal could see a first export cargo as early as February.

According to Cheniere CEO Jack Fusco, exports from Sabine Pass Train 5 won't be far behind.

In a recent interview with S&P Global Platts, the LNG executive said that he expects the Louisiana terminal's fifth train to begin producing LNG by later this year, followed by commissioning cargoes shortly thereafter.

H2 2019 AND BEYOND

During the second half of 2019, Platts Analytics is forecasting an even steeper ramp up in LNG demand with the startup of Elba Island's remaining Trains, 7-10 in July, followed by Cameron LNG Train 1, Freeport Train 1 and Corpus Christi Train 2 by next September.

Combined, the seven liquefaction trains would add another 2 Bcf/d in US liquefaction demand.

Looking further ahead, while Cameron, Freeport and Corpus Christi's remaining trains, currently under construction, seem certain to enter service over the next two to three years, LNG export projects still in search of buyers seem less certain now, thanks to an increasingly bitter trade war between Washington and Beijing.

While the two sides' tit-for-tat tariffs have yet to engulf the LNG industry, some industry analysts and market participants worry that the Chinese market, now the third largest for US LNG exports, could soon impose a crippling 25% tariff on US liquefied gas.

--J. Robinson, jrobinson@spglobal.com

--Tyler Jubert, tjubert@spglobal.com

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

--Ross Wyeno, rwyeno@spglobal.com

--Edited by Gail Roberts, gail.roberts@spglobal.com