Page 5 - NorthAmOil week 23

NorthAmOil COMMENTARY NorthAmOil
with Apache represents a commercial evolu- tion in the US LNG industry, as it will ensure the continued reliable delivery of natural gas to Cheniere from one of the premier producers in the Permian Basin, while enabling Apache to access global LNG pricing and receive ow assurance for its gas.”
The agreement is anticipated to support the next phase of growth at Cheniere’s Cor- pus Christi terminal on the Texas Gulf Coast, which will involve a shi to small-scale lique- faction trains. e third stage of development at the terminal is being planned to include up to seven 200 mmcf (5.7 mcm) per day trains, each with a capacity of 200 mmcf (5.7 mcm) per day. Cheniere expects to make a positive FID on this stageofCorpusChristiLNGin2020,andsaidit anticipates receiving all the remaining regulatory approvals for the project by the end of this year.
For its part, Apache said the agreement with Cheniere forms part of its long-term strategy to access new markets for gas produced from its Alpine High project in the Permian.
Competition
Cheniere’s Train 6 will start up around the time a number of companies expect a global shortfall of LNG to manifest, around the mid-2020s. is has triggered a rash of FIDs around the world. Recent approvals include Gazprom’s Ust Luga plant, BP’s Tortue LNG and Qatar Petroleum’s (QP) Golden Pass. More are expected this year, including two plants in Mozambique and the Arctic LNG 2 plan in Russia, in addition to a host of US projects.
Australia’s Woodside Petroleum, which has identi ed 2023 as a potential year of shortage, is working on plans for additional export capac- ity in its domestic market, with a second train
planned for Pluto LNG.
e rst wave of export projects in the US are
coming to fruition – Cameron LNG shipped its rst cargo recently, with the Marvel Crane tanker headed for France’s Dunkirk terminal. Plans for the second wave are now under way, with more than 20 projects, with total capacity of 235 mil- lion tpy on the drawing board, according to RBN Energy.
Exports to Asia have disappointed in recent times, amid poor pricing and the US-China trade war. is has led to a search for new mar- kets, primarily Europe.
US Secretary of Energy Rick Perry, speaking at a conference in Slovenia last week, expressed a determination to support Ukraine “in every rea- sonableway”,singlingoutenergyasaparticular front. e US has criticised Russia’s Nord Stream 2 as undermining European energy security – and bypassing Ukraine.
US LNG supplies present a possible alterna- tive gas source for Europe, particularly Eastern Europe where a number of plans are under way for new import infrastructure. Even Germany is working on regasi cation plans.
Perry was quoted by local media as saying the idea LNG could not compete with pipeline gas was “just false”. US gas resources are “massive. e ... pressure downward on price of LNG is going to continue,” he was quoted as saying by Euractiv.
Apache’s commitment to the next phase of Corpus Christi LNG, by taking on price risk for exports, is a demonstration of the innova- tive ways in which US exporters can compete around the world. Not all the US projects will reach sanction, but – if history is any guide – there is a high chance that capacity will be over- built in the current rush.™
Cheniere’s Train 6 will start up around the time a number of companies expect a global shortfall of LNG to manifest, around the mid-2020s.
Cheniere has made an FID on a sixth train at the Sabine Pass LNG terminal in Louisiana.
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