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US LNG Exports Expected To Increase as New Facilities Come On Line

After completion of the fourth liquefaction unit at the Sabine Pass LNG terminal in Louisiana in August, total US natural gas liquefaction capacity in the Lower 48 states increased to 2.8 Bcf/D. US LNG exports are now averaging 1.9 Bcf/D. Source: Cheniere Energy.

The US Energy Information Administration (EIA) reported that an increase in online liquefied natural gas (LNG) terminals has spurred on a subsequent increase in LNG export volumes. In August 2017, total US natural gas liquefaction capacity in the Lower 48 states increased to 2.8 Bcf/D following the completion of the fourth liquefaction unit at the Sabine Pass LNG terminal in Louisiana. With increasing liquefaction capacity and utilization, the EIA said that US LNG exports are now averaging 1.9 Bcf/D, and capacity utilization has averaged 80% for the year based on data through the end of November.

US liquefied natural gas exports and export capacity for January 2016–November 2017.
[Dark Blue=LNG Exports; Grey=Export Capacity]
Source: US Energy Information Administration.

 

US liquefied natural gas export capacity for 2016–2019.
Source: US Energy Information Administration.

 

Located on the coast of the US Gulf of Mexico (GOM) near the Louisiana-Texas border, Sabine Pass comprises four existing natural gas liquefaction units, or trains, with a fifth train currently under construction. When complete, Sabine Pass will have a total liquefaction capacity of 3.5 Bcf/D. Five additional LNG projects are currently under construction in the United States, and they are expected to increase total US liquefaction capacity to 9.6 Bcf/D by the end of 2019.

Sabine Pass is one of several facilities the EIA pointed out as having an impact on LNG export volumes:

  • The Cove Point liquefaction terminal (one train, 0.75 Bcf/D capacity) in Maryland is 97% complete. Dominion Energy, the owner of the facility, expects to place it in service before the end of 2017.

  • Elba Island LNG (10 modular liquefaction trains, 0.03 Bcf/D capacity each) in Georgia is owned by Kinder Morgan. Six trains are scheduled to come on line in the summer of 2018, and four trains are scheduled to come on line by May 2019.

  • Freeport LNG (three trains, 0.7 Bcf/D capacity each) in Texas is being developed by Freeport LNG Development. The first train is expected to come on line in November 2018, with the remaining two trains following in 6-month intervals.

  • Corpus Christi (two trains, 0.6 Bcf/D capacity each) in Louisiana is being developed by Sempra LNG and is expected to come on line in 2019.

The EIA estimated that overall utilization of existing LNG liquefaction facilities will average 80% in 2017 and 79% in 2018. The agency said that several factors can affect utilization rates, including weather-related disruptions, demand fluctuations, seasonality in import markets, production schedules for new LNG facilities, and maintenance on existing facilities.

At Sabine Pass, the ramp-up process combined with maintenance on Train 1 resulted in capacity utilization for Trains 1 and 2, averaging 51% in 2016. The EIA reported that capacity increased in 2017 with the addition of Trains 3 and 4, but the ramp-up periods for those trains, as well as lower spring demand in markets in Asia and Europe and disruptions caused by Hurricane Harvey in August, limited total utilization.

Exports from Sabine Pass began to increase in September as Train 4 ramped up to full production—reaching 2.7 Bcf/D in November—with an overall capacity utilization rate of 96% across four trains. Utilization at Sabine Pass is projected to remain above 90% this winter as a result of expected strong natural gas demand and high spot LNG prices in Asia and Europe.

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