Cheniere ships first Sabine Pass LNG export cargo to Brazil’s Petrobras

Cheniere has on Wednesday shipped the long-awaited first cargo from its Sabine Pass liquefaction and export facility in Louisiana. This event also marks a new era in global LNG trade as the U.S. is set to become a net exporter of domestically sourced shale gas.

LNG World News reported late Wednesday that the 160,000 cbm carrier Asia Vision, owned by energy giant Chevron, was fully loaded with LNG and ready to depart from the facility.

In the next few days, Brazil’s Petrobras will receive the first shipment, which equals about 96 million m³ of natural gas, to its Bahia LNG terminal, the Brazilian giant said in a statement.

Following regasification at the terminal in Bahia, the fuel will be pumped into Petrobras’ network of gas pipelines to supply Brazil’s domestic market, mainly for use in thermal power plants.

Low prices

The first LNG shipment comes at a time when oil and gas prices are at a very low level.

Spot natural gas prices in 2015 at the benchmark Henry Hub in Louisiana averaged $2.61/MMBtu, the lowest annual average level since 1999, according to the U.S. Energy Information Administration.

The average spot price at the Henry Hub for December of $1.93 per million British thermal units (MMBtu) was the lowest monthly average since March 1999.

According to EIA’s latest short-term energy outlook, spot natural gas prices are expected to average $2.65/MMBtu in 2016, and $3.22/MMBtu in 2017.

More U.S. LNG exports to come

The first commissioning cargo from the liquefaction and export facility in Cameron Parish was initially expected to occur by late January. The cargo was delayed due to instrumentation issues that were discovered during the final phases of plant commissioning.

Cheniere began producing liquefied natural gas from the Sabine Pass first train last week while loading operations began earlier this week following the Sunday arrival to the facility of the Asia Vision.

Sabine Pass is expected to load several commissioning cargos as part of its start-up process, after which it will need the approval from the Federal Energy Regulatory Commission to operate commercially, according to U.S. EIA.

The Sabine Pass liquefaction facility is the first of its kind to export cheap and abundant U.S. shale gas to overseas markets.

Cheniere is building liquefaction and export facilities at its existing import terminal located along the Sabine Pass River on the border between Texas and Louisiana.

The company plans to construct over time up to six liquefaction trains, which are in various stages of development. Each train is expected to have a nominal production capacity of about 4.5 mtpa of LNG.

Commissioning for Train 2 at the Sabine Pass plant is expected to commence in the upcoming months, according to Cheniere.

LNG World News Staff