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Cheniere ramps up feedgas deliveries to LNG export terminal in Texas

Highlights

Data suggests full cargo could be ready soon

Europe may provide more bang for the buck than East Asia

Houston — Cheniere Energy appears to be getting closer to having enough LNG produced at its export terminal near Corpus Christi, Texas, to ship a full cargo - the first from the site since startup November 14.

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The company has said the first export would occur soon, but has not been more specific, and a tanker that had been waiting at the terminal for about 10 days left over the Thanksgiving holiday - still unladen based on vessel tracking data. It diverted to Cheniere's Sabine Pass export terminal in Louisiana, where it loaded a cargo and departed again.

Despite the uncertainty on timing, activity has clearly picked up at the Texas terminal. Feedgas deliveries to the 700 MMcf/d capacity Train 1 ramped up to an average of around 300 MMcf/d since Friday, peaking at over 400 MMcf/d on Sunday, S&P Global Platts Analytics data shows. Flows dipped to approximately 250 MMcf/d on Monday.

In anticipation of the increased LNG production at Corpus Christi, Cheniere asked Williams' Transcontinental Gas Pipe Line to start up early an expansion project that will boost the amount of feedgas available to serve the export terminal. Transco said in a filing with the Federal Energy Regulatory Commission on November 19 that it was requesting permission for partial in-service of the Gulf Connector Expansion Project by Tuesday, so that it would be able to provide the LNG terminal up to 290 MMcf/d of service on an interim basis along the full path of the project beginning December 1.

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Speed to market was Cheniere's goal in getting its Texas terminal up and running ahead of schedule, amid a flurry of existing and proposed terminal projects that are poised to make the US a much bigger player in the global supply of LNG. Cheniere has five liquefaction trains in operation at Sabine Pass in Cameron Parish. A final investment decision is expected by early 2019 on whether to build a sixth train there. At the facility near Corpus Christi, three trains are under construction. Train 1 is producing the first commissioning cargo.

MARKET PRICES

The Texas terminal began taking feedgas in early July, but deliveries had remained rather modest until this past weekend. Initial production from the facility was being used to cool down the terminal's storage tanks. The pre-liquefaction period appears to have been longer than what was observed at the Sabine Pass terminal prior to startup there in 2016, Platts Analytics data shows.

The longer commissioning period may be due to the fact that Corpus Christi is a greenfield project, with brand new pipelines, storage tanks, and loading jetties, whereas Sabine Pass was a brownfield project, with some of the equipment already operational. CEO Jack Fusco told reporters November 15 during an event at the site to mark the facility's startup that workers planned to take the loading of the first cargo slowly to make sure it was done safely.

Fusco said at the time that the first cargo from Corpus Christi would likely go to the Far East, given netback opportunities. Since then, fluctuating price spreads and high shipping rates have suggested Europe could be a favorable destination. Platts Analytics estimates that Corpus Christi netbacks to the UK's National Balancing Point are currently around $1.25/MMBtu, roughly 14 cents/MMBtu stronger than the comparable netback to Northeast Asia, where Platts JKM is the benchmark price for spot LNG.

-- Harry Weber and Ross Wyeno, newsdesk@spglobal.com

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