Cheniere Energy sends LNG to Europe
Portugal is the destination for the seventh shipment from Louisiana locale
CAMERON PARISH, La. — Cheniere Energy’s Sabine Pass natural gas liquefaction plant has shipped its seventh cargo, roughly eight weeks after the company began producing the first LNG in the lower 48 United States.
The ship, called the Gaslog Salem, loaded at the terminal near the Texas border in Cameron Parish, La., and sailed Monday, on its way to Portugal, Cheniere officials said. The LNG shipments to Portugal represent the opening of a new market for U.S. shale gas in Europe, which has relied largely on Russian and Norwegian supplies.
Europe is the third continent after Asia and South America to receive U.S. shale gas shipped from the lower 48 states in the form of LNG. More than half of total U.S. LNG production may be destined for Europe by 2020, according to Wood Mackenzie, a British research firm.
More LNG tankers are expected to head to Europe’s underused terminals and liquid hubs as prices fall in Asia amid weaker demand in Japan, South Korea and China, the world’s biggest consumers of LNG. Net LNG imports to Europe rose 16 percent last year, according to the International Group of LNG Importers.
The shale boom has made the U.S. the world’s biggest gas producer, and converting it to LNG has provided an opportunity to open and expand foreign markets. Bank of America Merrill Lynch projects that the United States will become a net exporter of natural gas this year. Much of the gas leaves the country via pipeline.
“LNG coming out of the U.S. is probably the single most important thing that will transform the future LNG market,” Melissa Stark, energy managing director and global LNG lead at Accenture, said by email. “It heralds the arrival of a global market.”
The 1,000-acre Sabine Pass complex consists of six planned liquefaction units that supercool natural gas into a liquid, capable of processing 3.5 billion cubic feet per day of natural gas. Cheniere, headquartered in Houston, broke ground on the first unit in August 2012 and shipped its first cargo in February.
The second unit is expected to begin producing shortly, with others following at intervals of six to nine months. A fifth train broke ground last summer and is scheduled to come online in 2019. Cheniere hasn’t given the sixth train final approval.
The first seven cargos from Sabine Pass have sailed to locations such Brazil, India, and the Middle East. Interim Cheniere CEO Neal Shear said the variety of locations indicated the diverse buyers who are interested in the fuel.
“There’s a global bid for LNG that we didn’t expect,” he said.