American Oil and Gas Reporter - January 2019 - 51

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Industry Outlook
U.S. LNG Expands Into Global Market
Producers across the United States
have unlocked a flood of natural gas from
both gas shales and tight oil formations,
and those supplies are eagerly sought by
international customers in the form of
liquefied natural gas. The gas liquefaction
capacity needed to meet global demand
continues to expand as U.S. export facilities
commission additional trains, and new
terminals enter service.
In fact, the U.S. Energy Information
Administration reports that U.S. LNG
export capacity grew by 1.3 billion cubic
feet a day in 2018 to reach 4.9 Bcf/d, and
projects that it will soar by another 4 Bcf/d
in 2019 to 8.9 Bcf/d by year's end-making
it the third largest exporter in the world
behind Australia and Qatar (Figure 1).
"U.S. LNG exports continue to increase
with the growing export capacity," EIA
commented in a December report. "(The)
latest Short-Term Energy Outlook forecasts
U.S. LNG exports to average 2.9 Bcf/d
in 2018 and 5.2 Bcf/d in 2019 as the new
liquefaction trains are gradually commissioned and ramp up LNG production to
operate at full capacity."
According to EIA data, the average
2018 daily export volume was up 50 percent compared with 2017, when LNG
exports averaged 1.94 Bcf/d (in 2016,
U.S. exports averaged only 500 million
cubic feet a day. Moreover, each month's
exports in 2018 were higher than the corresponding month in 2017.
In fact, as of August, the United States
had logged 46 consecutive months of
year-to-year growth in LNG exports (and
counting). That steady growth has led to
a 265 percent increase in monthly LNG
export volumes since late 2014.
It also has allowed the country to become
a net exporter of natural gas (including
both LNG and pipeline imports/exports)
on an annual basis for the first time in
almost six decades. From January through
June, EIA says, net exports averaged 870
MMcf/d, more than double 2017's average
daily net exports (340 MMcf/d).
The 2.9 Bcf/d increase in total U.S.
LNG export capacity in 2018 was made
possible last spring by Dominion's 0.8
Bcf/d Cove Point terminal in Maryland
entering service, and Cheniere Energy's

Sabine Pass in Louisiana commissioning
a fourth train to increase its capacity to
2.8 Bcf/d. In late 2018, Cheniere also
brought a fifth train on line at Sabine Pass
in preparation for full commercial operation
in 2019, further expanding its capacity to
3.5 Bcf/d (a sixth train is permitted).
However, EIA points out the big capacity jump is now under way, with another four LNG facilities now preparing
to commence commercial operations. In
fact, the first of those facilities, Cheniere
Energy's Corpus Christi (Tx.) complex,
shipped it inaugural cargo in December,
several months ahead of schedule. Elba
Island in Georgia is scheduled to begin
operations in the first quarter, with
Cameron LNG's Louisiana facility,
Freeport LNG's Quintana terminal in
Quintana, Tx., and Cheniere Energy's
Corpus Christi (Tx.) liquefaction facility
all scheduled for in-service dates by the
end of 2019, ultimately increasing U.S.
LNG export capacity to 9.6 Bcf/d, according to EIA.
Train one at Corpus Christi produced
its first LNG in November and shipped
its first cargo aboard the Maria Energy
LNG tanker on Dec. 11, when the vessel
departed the facility bound for Greece,
marking the first export of LNG from
Texas, reports Cheniere President and
Chief Executive Officer Jack Fusco.
"Exporting the first commissioning
cargo of LNG from Texas demonstrates
Cheniere's ability to deliver projects safely

and ahead of schedule, including the first
green-field LNG export facility in the
lower-48," says Fusco, who notes that
both the Sabine Pass and Cove Point
sites originally had been designed to
import LNG.
According to Greece's state-owned
natural gas utility, DEFSA, the LNG
cargo will be delivered to the Revithoussa
LNG terminal outside of Athens. The
Corpus Christi facility consists of three
large-scale LNG trains, with an additional
seven smaller trains proposed. The second
train is expected to be completed in the
second half of 2019. Construction began
on the third train in May, with commissioning scheduled for 2021.
FERC Approvals
In addition to facilities under construction, another 12 LNG export terminal
applications are pending before the Federal
Energy Regulatory Commission. The EIA
forecasts that by 2030 the United States
may be exporting nearly 20.0 Bcf/d, with
exports expected to climb near 30.0 Bcf/d
later that decade.
Almost 60 percent of the domestic LNG
exports in 2017 were sold on a spot basis
to more than 20 countries, EIA says, adding
that although liquefaction capacity at Sabine
Pass is fully contracted under long-term
contracts, flexibility in those contracts'
destination clauses allows U.S. LNG to be
shipped to any market in the world.
In Asian markets, EIA points out the

FIGURE 1
U.S. Natural Gas Exports
Sabine Pass, Louisiana
Cove Point, Maryland
10 Corpus Christi, Texas
Cameron, Louisiana
8 Elba Island, Georgia
Freeport, Texas

Bcf/d

By Dan Holder

6
4
2
0

Freeport 3
Freeport 2
Elba Island 7-10
Cameron 3
Corpus Christi 2
Freeport 1
Cameron 2
Elba Island 1-6
Cameron 1
Corpus Christi 1
Sabine Pass 5
Cove Point
Sabine Pass 4
Sabine Pass 3
Sabine Pass 2
Sabine Pass 1

Corpus
Christi 3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016
2017
2018
2019
2020
2021

JANUARY 2019 51

American Oil and Gas Reporter - January 2019

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