Page 6 - NorthAmOil Week 31

NorthAmOil COMMENTARY NorthAmOil
US becomes third largest
LNG exporter as first wave
nears completion
The US is now the world’s third-largest LNG exporter but the US-China trade war still threatens further expansion
PERFORMANCE
WHAT:
The US has overtaken Malaysia to become the world’s third-largest exporter of LNG.
WHY:
Several export terminals have come online in
the US, with three more currently in the process of starting up.
WHAT NEXT:
The US-China trade war is making it more dif cult for further new project proposals to reach FID.
THE rst wave of US LNG export capacity is not yet fully online, but the country has already become the world’s third-largest exporter of the fuel. According to the latest data from the US Department of Energy’s (DoE) O ce of Fossil Energy, exports of US LNG hit a new record high of 4.7bn cubic feet (133mn cubic metres) per day in May. However, the news comes amid warnings that future US LNG export growth will slow owing to the country’s trade war with China, which would otherwise be expected to be a major customer.
e US Energy Information Administration (EIA) said US LNG exports had averaged 4.2 bcf (119 mcm) per day in the rst ve months of 2019. is put the country ahead of Malay- sia, which achieved LNG exports of 3.6 bcf (102 mcm) per day over the same period. e EIA anticipates the US remaining the third-largest LNG exporter in the world, behind Australia and Qatar, over 2019-20. In the longer term, the country is anticipated to become the largest exporter globally in the mid-2020s.
More capacity
In the short term, the start-ups of more new liq- uefaction facilities will add to the momentum. On July 26, the US Federal Energy Regulatory Commission (FERC) approved Sempra Ener- gy’s request to bring the rst liquefaction train at its $10bn Cameron LNG terminal in Louisiana into service. e plant had already exported four cargoes since May, according to Re nitiv data, making it the fourth LNG terminal in the Lower 48 states to begin overseas shipments. e Cam- eron plant is designed to produce about 12mn tonnes per year (tpy) of LNG. Sempra expects Trains 2 and 3 to enter service in the rst and second quarters of 2020.
Start-up is also in sight for the 15mn tpy Freeport LNG project on the Texas coast, where Train 1 is currently undergoing commissioning. Feed gas was introduced to the facility in July,
and the rst cargo from the project is anticipated to be ready to ship around the middle of this month. Around 5-10 commissioning cargoes will be shipped from Freeport LNG before com- mercial deliveries from the facility under long- term o ake contracts begin.
Both Freeport and Cameron LNG have been beset by delays related to construction and weather. Delays have also hit Kinder Morgan’s Elba Island LNG terminal in Georgia, which was initially due to have some of its small-scale lique- faction units enter service in 2018. Start-up was pushed back several times, and the facility ran into problems during the commissioning pro- cess. LNG production nally began in July, and it was reported last week that the rst cargo from the Elba facility was being prepared for loading.
Once these facilities are up and running, total US LNG export capacity is projected to rise to 7.2 bcf (204 mcm) per day by the end of 2019 and 9.9 bcf (280 mcm) per day in 2020 from around 6.3 bcf (178 mcm) per day currently.
At the moment, exports are also below capac- ity owing to previously scheduled turnarounds at Trains 3 and 4 at the Sabine Pass LNG terminal. Sabine Pass was the rst LNG export facility to
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w w w . N E W S B A S E . c o m Week 31 08•August•2019