Sabine Pass LNG decision expected in days
US energy firm Cheniere expects the final investment decision on its Sabine Pass liquefied natural gas (LNG) export project "in the next 30 days”, with company vice president of origination Ramzi Mroueh adding first cargoes are pencilled in for mid-2015
The 16 million tonne a year (t/y) Sabine Pass LNG facility is likely to be the US’ first LNG export plant and is the only planned project with government approvals to ship gas to any country.
LNG supply deals from Sabine Pass are attractive to Asian buyers because they are linked to the US Henry Hub gas price, differing from traditional contracts which are linked to the crude oil price.
At around $2.5 per million British thermal units (Btu), US gas prices are about six times lower than Asian spot LNG prices of around $16/million Btu. And Cheniere expects Henry Hub prices to remain low, with most shale-gas plays profitable at $6/million Btu.
“So if they (Asian LNG buyers) are comfortable buying LNG at $10-11/million Btu regardless of the oil price, this works for them,” Mroueh told the LNG Global Congress.
Despite some lobbying to restrict US LNG exports, Mroueh also expected the government to approve more LNG export projects next year after the election in November.
“I think in a year’s time, the whole political angle will go away and economics and the market will determine how many LNG projects will happen in the US,” he said.
Some politicians and large gas consumers have argued that the US should restrict LNG exports and instead use cheap gas to stimulate the domestic manufacturing sector.
The US has several planned projects and LNG export capacity could reach over 100 million tonnes if they all get approved and built, making the US the largest LNG exporter in the world.