US to add 66 mtpa of LNG export capacity in first rush of projects

The U.S. will add 66.2 million tonnes per annum (mtpa) of liquefied natural gas (LNG) export capacity by 2019, by which time final investment decisions (FIDs) on a second wave of export terminals will be made, analysts told Petrochemical Update.

Six LNG export projects are under construction in the U.S. and five other projects have received FERC approval. (Image credit: Tauri Minogue)


“In North America, we are optimistic that in addition to the midscale LNG projects starting construction this year we will witness the first large scale LNG trains required for the second wave reach FID in the 2018 time frame,” Shane Mullins, Industrial Info's (IIR) Vice President of Product Development said. "This will follow additional approvals of four more trains by 2020 to meet the next wave.”

Three Trains now exporting LNG from U.S.

Cheniere Energy and its engineering and procurement firm (EPC) partner Bechtel completed the first three trains of the Sabine Pass Liquefaction project in Cameron Parish, Louisiana in May and September 2016, and March 2017. The U.S. began exporting LNG when Cheniere brought its first three trains online.

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Source: Petrochemical Update. Data source: PIRA, IIR, company sources.

Six LNG projects have begun construction
There are six approved projects in the U.S. currently under construction. Once complete, these projects will add another 52.7 mtpa, or 7 Bcf/D of LNG export capacity to the U.S. The six projects under construction amount to $51 billion in total investments, according to IIR.

Source: Petrochemical Update. Data source: PIRA, IIR, company sources.

Cheniere Energy is expected to complete Train 4 by the end of 2017 and Train 5 by the end of 2019.

Sempra Energy and its EPC partner CB&I and Chiyoda began construction on the first three of five trains in Louisiana. Commercial operations are expected for Trains 1, 2 and 3 in early, mid and end of 2018, respectively and the first full year of commercial operations will be 2019.

All three Freeport LNG trains are now under construction by a joint venture among CB&I, Zachry Industrial, and Chiyoda International Corporation.The first two trains are on schedule to start up operations by September 2018 and February 2019, respectively. The third train is expected to be in operation by August 2019.

Cheniere began construction on its Corpus Christi Trains 1 and 2 in Texas in 2015. The liquefaction project is expected to be in service in 2018.

Construction began on November 1, 2016 on the approximately $2 billion Elba Island LNG project. Initial start-up is expected mid 2018 with final units coming on by the end of 2019.

The current Elba Terminal is an import facility capable of importing and regasifying foreign-sourced LNG. The Elba Liquefaction Project will be constructed in two phases. Phase I will include installation of six liquefaction units equal to an output capacity of 210 million cubic feet per day (MMcf) and modifications to the existing Elba Terminal to allow for export. Phase II will include installation of up to four liquefaction units equal to an output capacity of 140 MMcf per day.

Five more projects received FERC approval

Five additional U.S. projects have been approved by The Federal Energy Regulatory Commission (FERC), but are still waiting final investment decision (FID) or notice to proceed.

“In the U.S. with so many liquefaction projects in the advanced stage, there is a lot of competition for customers,” Mullins said. “You have to have solid firm contracts before the bank will loan you money so many delays are still expected.”

Source: Petrochemical Update. Data source: PIRA, IIR, company sources.

The total cost of the Cameron LNG project is estimated at $10 billion, the company said.

The U.S. Department of Energy approved in April a plan by Golden Pass Products to export domestically produced LNG to countries that do not have a free trade agreement (FTA) with the U.S. Golden Pass is now authorized to send out the equivalent of 2.21 Bcf/d of gas from a terminal to be developed near Sabine Pass in Jefferson County, Texas.

The Golden Pass approval brings the total LNG exports to non-FTA countries authorized to date to 19.2 Bcf/D from planned and operational facilities in Texas, Louisiana, Florida, Georgia and Maryland.

"These projects, if built, would position the U.S. to be the dominant LNG exporter in the world," DOE said in a statement.

11 more projects in planning phases

There are 11 additional projects in which formal FERC applications have been filed.

Source: Petrochemical Update. Data source: PIRA, IIR, company sources.

Tellurian expects that engineering, procurement, and construction costs will be approximately $13 to $16 billion for the Driftwood LNG export facility and expects to make a final investment decision to begin construction following regulatory approval in mid-2018.

IIR said there are 70 additional U.S. projects (135 trains) with a total investment of $267 billion, that have been proposed, but for which a formal application to FERC has not yet been submitted.

“There are major portfolio players such as Shell, Petronas and Exxon still waiting on the perfect timing to proceed with a decision,” Mullins said. “Most experts believe 2023 will be a time frame where additional supplies will be required to keep up with demand making 2018 a key time period for financial investment decisions to move forward for the next wave.”

Projects on hold

FERC rejected Jordan Cove in 2016, stating that the developer Veresen hadn’t demonstrated a need for the pipeline and that it faced overwhelming opposition from landowners along the route.

A modified proposal from Veresen is now working its way through the FERC process again. Meanwhile, Pembina Pipeline Corporation agreed in May to acquire Veresen. The deal is expected to close late in the third quarter or early in the fourth quarter of 2017.

The deal gives Pembina a 100% ownership of the proposed Jordan Cove LNG project, which is estimated to be worth about $6 billion.

Source: Petrochemical Update. Data source: PIRA, IIR, company sources.

By: Heather Doyle