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Wave of US LNG nears

From importer to exporter, shale gas has transformed the US energy landscape

In April this year, Cheniere Energy's Sabine Pass liquefied natural gas export facility loaded and shipped its 100th cargo, a milestone for the US' growing gas export industry. This year, the country will see a surge of new LNG export capacity start up, helping to make the country a net natural gas exporter by 2018 for the first time since the 1950s.

Cheniere brought the first two trains at Sabine Pass into operation last year and will double its capacity this year with train three mostly finished and ready to start exporting by June. Train four is due to start up later in the year. Once trains three and four are completed, Sabine Pass will have 18m tonnes per year in send-out capacity, making Cheniere by far the US' largest single consumer of natural gas.

This year will also see Dominion Energy open its Cove Point export facility in Maryland, in the northeast of the US. Cove Point is on track to start up in late 2017, says Dominion, and will be able to export 5.25m t/y. The facility has signed sales and purchase agreements with Gail India and Japan's Sumitomo, so most of the Cove Point's exports are expected to head to Asia.

Export surge

It's the start of a wave of new US export capacity that will make cheap shale gas a force on global markets. Another Cheniere project in Corpus Christi on Gulf Coast will start up in 2018. The facility's first two trains are under construction and will add 9m t/y of export capacity, nearly all of which is committed to long-term sales contracts. Sempra Energy's Cameron LNG terminal on the Gulf Coast is also nearing completion, with three trains totaling 14.95m t/y of capacity also on track to start in 2018. Freeport LNG plans to bring 13.9m t/y online in 2019.

In total, nearly 58m t/y of new US liquefaction capacity is under construction, according to the International Gas Union, equivalent to 17% of total existing global capacity.

The US is expected to account for about half of all LNG export capacity growth over the next five years.

Over that period, the country will become a major gas exporter. After becoming a net exporter in 2018, shipments are expected to rise to around 10bn cubic feet a day in the early 2020s, a remarkable reversal considering that just a decade ago markets saw the US as the world's most important LNG buyer.

Set to surge: new shale gas-LNG projects will boost global gas supply

This article appeared in the AOGC daily newsletter, produced by Petroleum Economist for attendees of the 19th Asia Oil and Gas Conference held in Kuala Lumpar.

 

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