Sabine Pass LNG Terminal

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Sabine Pass LNG is an operating LNG export terminal in Louisiana, USA.

Location

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Project Details, Import Terminal

  • Owner: Sabine Pass LNG[1]
  • Parent: Cheniere Energy
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.75409666, -93.87405115 (exact)
  • Capacity: 30.4 mtpa[2]
  • Status: Operating[2]
  • Type: Import[2]
  • Start Year: 2008[2]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Project Details, Export Terminal

Trains 1 & 2

  • Owner: Sabine Pass Liquefaction, LLC[1]
  • Parent: Cheniere Energy[3]
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Type: Export[3]
  • Trains: 2[3]
  • Capacity: 10 mtpa (5 mtpa per train)[4][1]
  • Status: Operating[3]
  • Start Year: 2016[3]
  • Cost: Between US$17.5 and US$18.5 for Trains 1-5[5]

Trains 3 & 4

  • Owner: Sabine Pass Liquefaction, LLC[1]
  • Parent: Cheniere Energy[3]
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Type: Export[3]
  • Trains: 2[3]
  • Capacity: 10 mtpa (5 mtpa per train)[4][1]
  • Status: Operating[3]
  • Start Year: 2017[3]
  • Cost: Between US$17.5 and US$18.5 for Trains 1-5[5]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Train 5

  • Owner: Sabine Pass Liquefaction, LLC[1]
  • Parent: Cheniere Energy[3]
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Type: Export[3]
  • Trains: 1[3]
  • Capacity: 5 mtpa[4][1]
  • Status: Operating[6]
  • Start Year: 2018[7]
  • Cost: Between US$17.5 and US$18.5 for Trains 1-5[5]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Train 6

  • Owner: Sabine Pass Liquefaction, LLC[1]
  • Parent: Cheniere Energy [3]
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Type: Export[3]
  • Trains: 1[3]
  • Capacity: 5 mtpa[8]
  • Status: Operating[9][10]
  • Start Year: 2021[1]
  • Financing: US$1.5 billion in loans from a consortium of international banks advised by Mitsubishi UFG and Societé Générale[11]
  • Cost: US$2.5 billion (Engineering, procurement, and construction contract only)[5]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Stage 5 Expansion Project

  • Owner: Sabine Pass Liquefaction, LLC[12]
  • Parent: Cheniere Energy[12]
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Capacity: 16.83 mtpa[13]
    • Formerly 20 mtpa[12]
  • Trains: 2[13]
  • Status: Proposed[12]
  • FID status: Pre-FID (2025)[14]
  • Type: Export[12]
  • Start year: 2031[13]
  • Cost: US$13-15.5 billion[15]
  • Financing:
  • Associated infrastructure:

Background

Trains 1-4

On April 16, 2012, the Federal Energy Regulatory Commission granted approval for Houston-based Cheniere Energy to build the first liquefied natural gas (LNG) export terminal in the lower 48 United States. The US$5 billion Sabine Pass LNG project is located at an existing import terminal in Cameron Parish, Louisiana, along the Gulf Coast.

This facility is estimated to generate between 0.26 metric tons of carbon dioxide equivalent (CO2e) for every metric ton of LNG produced according to a 2013 report.[16]

In February 2016 Sabine Pass made its first LNG shipment.[17] It was the first LNG shipment from the lower 48 states.[18] It rode on an Asian Vision tanker with the capacity to transport 3.39 billion cubic feet of LNG.[19] The purchaser of the LNG is Brazil's state owned company, Petroleo Brasileiro. It will convert to gaseous form at a facility in Brazil.

Gail India Ltd. bought the second shipment of LNG from Cheniere Energy Inc.'s Sabine Pass that makes the facility the first Asian importer of U.S. shale gas. The shipment left Louisiana on March 15, 2016.[20]

Gail India has agreed to buy 3.5 million metric tons of LNG a year over the next two decades from Sabine Pass.[21]

In February 2017, Bloomberg reported Cheniere had entered into a supply deal that would see gas from the Montery Shale, including drilled from British Columbia and Alberta, shipped from the facility.[22]

Cheniere has Energy Department license to ship domestic gas to nations that are not U.S. free-trade partners. U.S. gas producers will have the capacity to export up to 18 million tons of LNG annually, worth about US$1.7 billion at current prices.[23][24]

It was FERC's first authorization of a project of this kind, FERC said in an accompanying statement: “Today’s order finds that the project can be constructed and operated safely and with minimal environmental impacts."[23]

In its Sabine Pass order, FERC settled on the DOE's earlier findings that increased LNG exports "will result in increased production that could be used for domestic requirements if market conditions warrant such use, and this will tend to enhance U.S. domestic energy security." FERC also dismissed charges by the Sierra Club and the Gulf Coast Environmental Labor Coalition that the commission shortchanged its environmental and safety reviews, citing conditions that Cheniere comply with the federal Clean Air Act, including rules governing greenhouse gas emissions and the use of "best available" pollution control technology.

Opposition

In April 2012, the Sierra Club filed a motion challenging the Federal Energy Regulatory Agency's (FERC) approval of the project.[25]

Financing for Trains 1-4

A range of financing totalling US$20.375 billion between 2012 and 2017 has gone to the first four trains from a wide variety of financial institutions:

  • Debt financing of US$3.6 billion in 2012 from 19 international commercial banks and Korea Development Bank.[26]
  • Debt financing of US$1 billion in 2013 from 19 international commercial banks.[27]
  • Debt financing of US$5.9 billion in 2013 from Export-Import Bank of Korea, Korea Trade Insurance Corporation and 26 international commercial banks.[28]
  • Debt financing of US$325 million in 2014 from Scotiabank, Mizuho, Standard Chartered, Lloyds, Crédit Agricole, Mitsubishi UFG and Société Générale.[29]
  • A US$2.5 billion bond issue in 2014, organised by BBVA, Crédit Agricole, Credit Suisse, HSBC and ING, and involving other commercial bank participants.[30]
  • A US$2 billion bond issue in 2015 involving 15 international commercial bank participants.[31]
  • Two bond issues in 2016 totalling US$3 billion and featuring a range of international commercial bank participants.[32] [33]
  • Two bond issues in 2017 totalling US$2.15 billion and featuring a range of international commercial bank participants.[34] [35]

Trains 5 & 6

Cheniere Energy initiated a project to develop two additional LNG trains adjacent to the Sabine Pass LNG receiving terminal in Cameron Parish, Louisiana. The Sabine Pass site can readily accommodate up to six LNG trains capable of processing over 3.5 Bcf/d of natural gas. The design production capacity of each liquefaction train would be approximately 4.5 million tons per annum (mtpa). The fifth LNG train began accepting feedgas in 2018, suggesting that operations had begun. The sixth train reached a final investment decision in June 2019, is being financed via US$1.5 billion in loans from a consortium of international banks and is under construction.[36][37][6][11]

As of March 2020, Trains 1 through 5 were operational and Train 6 was under construction. Train 6 construction completion is expected within the first half of 2023.[38]

In August 2020, Cheniere said it was planning for Train 6 to be ready for operations ahead of schedule in the second half of 2022.[39]

In May 2021, Cheniere CEO Jack Fusco told investors that Train 6 was now expected begin producing LNG and commissioning before the end of the year, unless significant weather disruptions including from the upcoming hurricane season affected this schedule.[40]

In September 2021, following a request from Cheniere, FERC granted permission for the introduction of feedgas to commission parts of the sixth liquefaction train. Cheniere has said it now expects Train 6 will enter commercial service in early 2022. Analysts have pointed out that the unit will likely start producing LNG in test mode in late 2022.[41]

Financing for Trains 5 and 6

Financing deals for Trains 5 and 6 so far comprise:

  • Debt financing of US$3.7 billion in 2015 from 25 international commercial banks with US$1.2 billion debt provided at the same time for working capital. Part of the overall lending package also provided US$900 million for refinancing existing debt on trains 1-4.[42]
  • Debt financing of US$750 million and a general corporate loan of US$750 million in 2019 from 29 international commercial banks for the development of Train 6.[43]

Additional financing

Via a general corporate loan, Cheniere Energy borrowed US$1.2 billion in 2020 for project refinancing of the in-construction Sabine Pass LNG Terminal.[44] The company also tapped the bond markets for US$2 billion in May 2020 to pay down outstanding debt at Sabine Pass[45], and further received a US$2.62 billion loan in June 2020 to repay debt on Sabine Pass and its Corpus Christi LNG Terminal.[46]

In March 2024, Cheniere announced that it had priced a $1.5 billion offering of senior notes which are due 2034.[47]

Stage 5 Expansion Project

The expansion project was initially envisioned to have up to three liquefaction trains with a nominal production capacity of 6.5 mtpa each, totaling about 20 mtpa additional capacity. Additional above-ground storage would also be built, with connecting facilities and fossil gas pipeline.[12]

In April 2023, Cheniere executed a contract for Bechtel to conduct a Front End Engineering Design (FEED) study for the expansion project. Part of this study includes evaluating the possibility of a carbon capture and storage solution at Sabine Pass.[48]

On 30 May 2023, FERC accepted the project into the pre-filing review process.[49]

A fossil gas pipeline is also proposed for the expansion, to connect the additional export capacity to US shale gas-producing regions.[50]

In December 2023, Cheniere said that it had revised the plans for the expansion such that it would two trains, instead of three, each with a capacity of 7 mtpa. The total capacity of the expansion was reported to be 16.83 mtpa, including the trains and "debottlenecking opportunities."[13] The reason for downscaling the original plans is inflation, according to Cheniere's CEO.[51]

Contracts

In May 2023, Cheniere entered a sales and purchase agreement (SPA) with KOSPO for 0.4 mtpa of LNG delivered on an ex-ship basis from 2027 to 2046.[52]

In June 2023, Cheniere entered an SPA with Equinor for 1.75 mtpa for a duration of 15 years, starting in 2027.[52] The same month, China's ENN agreed to purchase 1.8 mtpa over 20 years beginning in 2026, with half of the volume contingent on the Sabine Pass expansion.[53]

In August 2023, Cheniere signed an SPA with BASF for the sale of 0.8 mtpa LNG on a free-on-board basis, beginning in 2026 and running through 2043. The deal is contingent on a positive final investment decision (FID) for train seven.[54]

In November 2023, Cheniere signed a long-term SPA with China's Foran Energy Group for the sale of 0.9 mtpa over 20 years. The contract is linked to the second train of the Sabine Pass Stage 5 Expansion project, or Train 8.[55]

Also in November 2023, Cheniere announced it had signed a long-term integrated production marketing gas supply agreement with ARC Resources U.S. Corp., a unit of Canada's ARC Resources. Under this agreement ARC Resources will sell 140,000 MMBtu of gas to the Sabine Pass Stage 5 Expansion project for 15 years beginning when the project is operational. At the same time, Cheniere announced a long-term SPA with Austrian energy firm OMV for the sale of 0.85 mtpa beginning in late 2029, although it is unclear with which of Cheniere's projects this deal is associated.[56]

Hurricane Laura Forces Shutdown

On August 25, 2020, Cheniere was forced to shut down all operations at the terminal and evacuate staff due to Hurricane Laura hitting Louisiana with 150 mile-per-hour winds. A week later, and having found no significant storm damage, the company said it had begun the process to restore the facility's operations, though no timeline was given for when production would resume.[57]

Articles and resources

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 International Group of Liquefied Natural Gas Importers (May 24, 2022). "Annual Report 2022 Edition" (PDF). GIIGNL. Retrieved July 11, 2022.{{cite web}}: CS1 maint: url-status (link)
  2. ↑ 2.0 2.1 2.2 2.3 The LNG Industry: Annual Report 2020, page 48, International Group of Liquefied Natural Gas Importers, accessed April 29, 2020
  3. ↑ 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 2020 World LNG Report, page 102, International Gas Union, April 27, 2020
  4. ↑ 4.0 4.1 4.2 "GIIGNL 2021 Annual Report”, page 41, GIIGNL, accessed May 4, 2021
  5. ↑ 5.0 5.1 5.2 5.3 Reuters Staff. "Cheniere targets earlier Texas LNG export unit completion in first-half 2021". U.S. Retrieved 2023-08-24. {{cite news}}: |last= has generic name (help)
  6. ↑ 6.0 6.1 Cheniere requests to introduce feed gas to Sabine Pass LNG train 5 LNG World News, August 29, 2018
  7. ↑ U.S. Liquefaction Capacity, Energy Information Administration, November 3, 2020
  8. ↑ The LNG Industry: GIIGNL Annual Report. GIIGNL. May 2022.
  9. ↑ Why Is Cheniere Energy (LNG) Down 31% Since Last Earnings Report? Yahoo Finance, Mar. 26, 2020.
  10. ↑ "Sabine Pass". Cheniere. Retrieved 2022-04-14.
  11. ↑ 11.0 11.1 Houston LNG exporter to seek $1.5B in debt funding Houston Business Journal, Sep. 10, 2019
  12. ↑ 12.0 12.1 12.2 12.3 12.4 12.5 12.6 "https://lngir.cheniere.com/news-events/press-releases/detail/272/cheniere-initiates-permitting-process-for-significant". {{cite web}}: External link in |title= (help)CS1 maint: url-status (link)
  13. ↑ 13.0 13.1 13.2 13.3 Staff, LNG Prime (2023-12-27). "Update: Cheniere says it is not reducing Sabine Pass LNG expansion plans". LNG Prime. Retrieved 2024-05-21.
  14. ↑ 14.0 14.1 Cheniere. Re: Sabine Pass Liquefaction, LLC and Sabine Pass Liquefaction Stage V, LLC Sabine Pass Stage 5 Expansion Project Docket No. PF23- ___- 000 Request to Initiate NEPA Pre-Filing Process. February 22, 2023.
  15. ↑ "Sabine Pass LNG: Cheniere Reveals Price Tag for Next Expansion". Energy Intelligence. 2024-03-05. Retrieved 2024-05-21.
  16. ↑ "BC’S Carbon Pollution Could Double with LNG Plants" Tarika Powell, Sightline Institute, June 7, 2017.
  17. ↑ Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Forbes, March 7, 2016
  18. ↑ Harry Weber and Naureen Malik "Cheniere Loading Tanker With First U.S. Shale Gas for Export" Bloomberg, February 23, 2016.
  19. ↑ Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Forbes, March 7, 2016
  20. ↑ Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Forbes, March 7, 2016.
  21. ↑ Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Bloomberg, March 7, 2016.
  22. ↑ Naureen Malik and Stephen Cunningham"U.S. Looks Set to Export First LNG on Canada's Behalf" Bloomberg, February 28, 2017.
  23. ↑ 23.0 23.1 Luke Johnson, "The Federal Energy Regulatory Commission (FERC) approved on Monday Cheniere Energy’s plans to liquefy and export natural gas, clearing the way for the Houston-based company to be first US LNG exporter in decades," Upstream, April 16, 2012.
  24. ↑ "Sabine Pass Liquefaction Project, Louisiana, USA" Bechtel, accessed October 21, 2015.
  25. ↑ Enviros File DOE Protest Over Cheniere LNG Export Project Law360, April 20, 2012
  26. ↑ Sabine Pass LNG Terminal Additional Facility 2012 IJGlobal, accessed May 26, 2020
  27. ↑ Sabine Pass LNG Terminal Additional Facility 2013 IJGlobal, accessed May 26, 2020
  28. ↑ Sabine Pass LNG Train 3 and 4 Financing IJGlobal, accessed May 26, 2020
  29. ↑ Sabine Pass Liquefaction Train L/C Facility 2014 IJGlobal, accessed May 26, 2020
  30. ↑ Sabine Pass LNG Train Additional Facility 2014 IJGlobal, accessed May 26, 2020
  31. ↑ Sabine Pass LNG Bond Issue 2015 IJGlobal, accessed May 26, 2020
  32. ↑ Sabine Pass LNG Bond Facility 2016, IJGlobal, accessed May 26, 2010
  33. ↑ Sabine Pass LNG Bond Facility 2 2016, IJGlobal, accessed May 26, 2020
  34. ↑ Sabine Pass Liquefaction Bond Facility 1 2017 IJGlobal, accessed May 26, 2010
  35. ↑ Sabine Pass Liquefaction Bond Facility 2 2017, IJGlobal, accessed May 26, 2020
  36. ↑ Trains 5 & 6 Cheniere, accessed July 17, 2019.
  37. ↑ Sergio Chapa,Cheniere Energy inks deals to support two expansion projects Houston Chronicle, June 3, 2019.
  38. ↑ "Why Is Cheniere Energy (LNG) Down 31% Since Last Earnings Report?", Yahoo! Finance, March 26, 2020
  39. ↑ Sabrina Valle, Scott DiSavino, "Cheniere tops second-quarter profit estimates, accelerates LNG plant expansion", Reuters, Aug. 6, 2020
  40. ↑ Harry Weber, Ross Wyeno, "Forward spreads point to further upside for early startup of new US LNG capacity", S&P Global, May 24, 2021
  41. ↑ Scott DiSavino, Cheniere La. Sabine 6 LNG export unit moves closer to entering service, Reuters, Sep. 22, 2021
  42. ↑ Sabine Pass LNG Train 5 Financing and Trains 1,2,3 & 4 Refinancing IJGlobal, accessed May 26, 2020
  43. ↑ Sabine Pass LNG Terminal Additional Facility 2019 IJGlobal, accessed May 26, 2020
  44. ↑ Sabine Pass LNG Refinancing 2020 IJGlobal, accessed May 26, 2020
  45. ↑ Sabine Pass LNG Refinancing 2020 (2) IJGlobal, accessed Oct. 5, 2020
  46. ↑ Sabine Pass and Corpus Christi LNG Refinancing 2020 IJGlobal, accessed Oct. 5, 2020
  47. ↑ Staff, LNG Prime (2024-03-06). "Cheniere in $1.5 billion senior notes offering". LNG Prime. Retrieved 2024-05-21.
  48. ↑ GIIGNL. The LNG industry: GIIGNL Annual Report. June 2024.
  49. ↑ "https://elibrary.ferc.gov/eLibrary/docinfo?accession_num=20230222-5172". {{cite web}}: External link in |title= (help)CS1 maint: url-status (link)
  50. ↑ "https://www.energyportal.eu/news/cheniere-energy-eyes-new-gas-pipeline-to-feed-lng-expansion-2/70190/". {{cite web}}: External link in |title= (help)CS1 maint: url-status (link)
  51. ↑ Stewart, Robert (2024-03-18). "Cheniere expansion plans shifted because of inflation, says chief". upstreamonline.com. Retrieved 2024-05-21.
  52. ↑ 52.0 52.1 "Cheniere signs LNG supply agreement with Equinor for Sabine Pass expansion". Reuters. Retrieved 2023-08-24.
  53. ↑ "Cheniere signs LNG supply deal with China's ENN". Reuters. Retrieved 2023-08-24.
  54. ↑ LNG Global. Cheniere Energy Secures New Long-Term LNG Deal with BASF to Support Expansion. August 22, 2023.
  55. ↑ Mishra, Shivam (2023-11-03). "Cheniere signs long-term LNG supply deal with China's Foran". Offshore Technology. Retrieved 2024-05-21.
  56. ↑ Staff, LNG Prime (2023-11-30). "Cheniere, OMV seal long-term LNG supply deal". LNG Prime. Retrieved 2024-05-21.
  57. ↑ Harry Weber, Cheniere's Sabine Pass works to resume production at US facility following storm S&P Global, Aug. 31 2020
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