Cheniere gets in on LNG boom
Company readies first shipment at Corpus Christi plant
The Houston-based exporter readies its first shipment of liquified gas at its Corpus Christi plant.
Cheniere Energy this week began production of liquefied natural gas at its massive Corpus Christi complex as the Houston exporter prepares to ship its first LNG cargo from Texas.
Cheniere completed construction of its first processing unit this summer and spent the past few months putting the equipment into service. Crews started LNG production on Wednesday and are using a Marshall Islands-flagged tanker named Golar Tundra to test the facility’s dock and export equipment.
If the tests are successful, the tanker could be loaded with up to 170,000 cubic meters of LNG that will be sold to whoever pays the highest price. Under current market conditions, Cheniere executives said, the most likely buyers would come from East Asian nations such as Japan, South Korea or China.
Cheniere on Thursday marked the milestone with a celebration that drew dignitaries from eight nations, as well as Texas Gov. Greg Abbot and U.S. Commerce Secretary Wilbur Ross.
“Texas is the energy capital of world and thanks to Cheniere, it just got bigger,” Abbott told a crowd of about 400 people.
Cheniere became the first company to export LNG from the United States in Feb. 2016, when it shipped from its Sabine Pass complex in Louisiana, and has led the burgeoning U.S. LNG industry. Record natural gas from Texas and other U.S. shale plays is spurring billions of dollars of investment, most of it focused on the Gulf Coast.
Only one other company, Dominion Energy of Richmond, Va., has begun exporting LNG from the United States, but others are expected to follow in the coming months, including two Houston firms, Kinder Morgan, which is completing an export terminal in Georgia, and Freeport LNG, which will operate a Gulf Coast terminal at Quintana Island. Several companies, including Sempra Energy of San Diego and Tellurian of Houston, are working on projects expected to start up in the coming years.
Over the past two years, Cheniere has emerged as the largest consumer of natural gas in the United States, buying as much as 4 billion cubic feet of natural gas per day from hundreds of companies from the Permian Basin, Eagle Ford Shale and production areas in 22 other states.
Natural gas, in a process known as liquefaction is supercooled into a liquid to make it easier to transport. Cheniere is investing $15 billion into three processing units, called trains, for the first phase of development at its Port of Corpus Christi export terminal. Once at full capacity, the first unit will be able to process 750 million cubic feet of natural gas per day.
Representatives of Cheniere’s utility company customers from China, Indonesia, Australia, Spain, France, Portugal and Poland attended Thursday’s event. In a short speech, Ross called the facility an example of American technology and innovation.
“This new LNG facility is an outstanding example of American ingenuity,” Ross said. “This plant embodies our great and long-standing American spirit. We create vast new opportunities from the early seeds of innovation.”
Cheniere Energy CEO Jack Fusco said that demand for LNG is strong, particularly in Asia.. “China has continued to consume about 50 percent more LNG than they did the year before and they consumed 50 more than the year before that,” he said.
The facility’s opening comes as the Port of Corpus Christi has emerged as an export hub for crude oil and refined products. Port of Copus Christi CEO Sean Strawbridge said LNG is the next growth opportunity for the Port.
Port officials are raising funds for a $326 million project to widen and deepen the Corpus Christi Ship Channel to 54 feet deep and 520 feet wide. Although the port’s ship channel depth can accommodate fully loaded LNG tankers, Strawbridge said Cheniere would benefit from channel improvements, which would make it easier for ships to turn and allow for two-way traffic.