From Fuel Fix/Bloomberg
Cheniere Energy Inc., which shipped its first cargo of liquefied natural gas in February, has been cleared to double exports from its landmark terminal in Louisiana.
Cheniere’s second liquefaction plant at Sabine Pass was approved by the Federal Energy Regulatory Commission in a notice on Wednesday. Each plant has the capacity to produce the equivalent of about 650 million cubic feet a day.
Additional volumes will come at a testing time for the global LNG market, which is reeling from a worldwide glut that’s set to worsen through 2020 as demand from key Asian customers slows. Still, the first LNG exports from the lower 48 states have helped whittle down a U.S. supply glut and put Cheniere on the road to posting its debut profit.
Train 2, as the plant is known, began producing LNG on July 28 during the commissioning process. Trains 1 and 2 were shut in late September for planned work, which was expected to last about four weeks. Next year, the company is planning to bring online a third plant and start the commissioning of a fourth.
Sabine Pass took in 119 billion cubic feet of gas from April 1, which marked the start of the U.S. gas stockpiling season, through Sept. 9, ABB Inc. data show. During the same period, the country’s supply glut versus the five-year average fell to 299 billion cubic feet from 874 billion.
By starting up two liquefaction plants, Cheniere will be able to start taking in fixed payments for 20 years from customers whether or not they decide to actually take any LNG from Sabine Pass. A contract with Royal Dutch Shell Plc goes into effect this December for Train 1, while one with Spain’s Gas Natural Fenosa starts in September 2017, according to a company presentation earlier this year.
Sabine Pass has demonstrated that the plant has “been constructed in accordance with commission approval and applicable standards and can be expected to operate safely as designed,” the commission said in the notice.
