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Viewpoint: US LNG exports to jump in 2018

27 Dec 2017 14:00 GMT
Viewpoint: US LNG exports to jump in 2018

Houston, 27 December (Argus) — US LNG exports will increase significantly in 2018 as three more projects are scheduled to come on line.

The new liquefaction trains likely will raise contractually guaranteed, or baseload, US LNG export capacity in 2018 by about 57pc to 28.3mn t/yr, equivalent to about 3.6 Bcf/d (37bn m³/yr) of gas. Peak US capacity would increase by 65pc to 33mn t/yr, equivalent to about 4.2 Bcf/d (43bn m³/yr).

Such volumes over an entire year would rank the US as the world's third-leading LNG exporter behind Qatar and Australia, but it is unclear how much the US will export next year because some of the new facilities would start operating in late 2018.

Dominion's Cove Point LNG terminal in Maryland is scheduled to begin exporting early next year. Kinder Morgan's Elba Island LNG project in Georgia is slated to begin operating in mid-2018 and reach full production by mid-2019. The first liquefaction train at the Freeport LNG terminal in Texas is expected to start exporting in late 2018, with the second and third trains to come on line in 2019.

The $4bn Cove Point facility would have baseload capacity of 4.6mn t/yr and peak capacity of 5.75mn t/yr from one liquefaction train. Japanese trading house Sumitomo and Indian state-controlled Gail have 20-year contracts for 2.3mn t/yr of liquefaction capacity each. Sumitomo has, in turn, signed 20-year deals to sell most of its supplies to Japanese utilities, with 1.4mn t/yr going to Tokyo Gas and 0.8mn t/yr to Kansai Electric.

The $2.2bn Elba Island terminal near Savannah, Georgia, would have combined baseload capacity of 2.5mn t/yr from 10 small liquefaction trains and combined peak capacity of 4mn t/yr. Elba Island owner Kinder Morgan declined to say many trains likely would start operating next year, but if half of the units come on line in 2018 it would bring the US total capacity to 28.3mn t/yr. Shell is the sole customer for Elba Island supplies.

The first liquefaction train at the $15bn Freeport LNG terminal in Texas is scheduled to start service in the fourth quarter of 2018. The unit would have baseload capacity of 4.4mn t/yr and peak output of 5.2mn t/yr. Japanese utilities Chubu Electric and Osaka Gas each have a 20-year contract for 2.2mn t/yr from train 1.

Six major LNG export terminals are being built or completed in the contiguous US with combined baseload capacity of about 60mn t/yr and peak capacity of about 70mn t/yr. Louisiana's Sabine Pass terminal started exporting in February 2016 and now has peak capacity of 20mn t/yr from four trains.

Next year could also see the first major investment in new US LNG export capacity in several years, as a number of proposed projects hope to come on line in the early 2020s. Some of the projects that plan to make positive investment decisions in 2018 include Corpus Christi train 3, Golden Pass LNG and Rio Grande LNG in Texas; Magnolia LNG and Driftwood LNG in Louisiana; Delfin LNG in US waters of the Gulf of Mexico; and Jordan Cove LNG in Oregon.

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