Cheniere to start US LNG export facility in late 2015
By BEN LEFEBVRE
Cheniere Energy reiterated Friday it will be ready to begin producing liquefied natural gas at its terminal in Sabine Pass, La., in late 2015, a step that will lead to the first exports of natural gas extracted in the contiguous US.
The announcement underscores how Cheniere, the only company to possess the necessary government permits to export natural gas to countries not in free-trade agreements with the US, is on schedule with its first two processing units while government regulators pore over about two dozen permit applications from competing projects.
Cheniere said construction was about 20% complete on the first two Sabine Pass LNG processing units, known as trains.
Estimated completion dates for the two trains are running according to Cheniere's advanced schedule, with the first expected to begin LNG production in late 2015, the company said.
Cheniere in October 2011 signed a 20-year contract to sell 4.2 million tpy of LNG from Train 1 to a subsidiary of BG Group.
Cheniere was among a handful of companies that built LNG import terminals in the last decade, as the US was expected to become a major natural gas importer due to declining production. But hydraulic fracturing helped energy producers unlock natural gas from shale formations, leading to an unexpected supply glut that has crashed prices and opened up the possibility of exports.
Cheniere moved before others to turn its idle Sabine Pass LNG import terminal, sitting in a deep water shipping channel less than four miles from the Gulf of Mexico, into an export facility.
Overall, Cheniere has signed contracts to sell 16 million tpy from four process units at Sabine Pass to customers including Gas Natural Fenosa, Korea Gas Corp. and GAIL (India). Cheniere has also agreed to sell 2 million tpy to Total at a proposed fifth processing unit at Sabine Pass.
US natural gas prices have fallen 76% since June 2008, making them among the lowest in the world and attractive to buyers in Asia and Europe.
ExxonMobil, Freeport LNG and other would-be LNG exporters are still waiting for government approval to ship natural gas to countries not in a free-trade agreement with the US, a group that includes lucrative markets such as Japan.
But as the company makes headway in constructing its terminal, rising costs caused Cheniere and its Cheniere Energy Partners unit to post wider fourth-quarter losses Friday. Cheniere Energy reported a loss of $94.3 million, compared with a loss of $57.8 million a year earlier. Revenue dropped 7.1% to $67.4 million.
Dow Jones Newswires
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