Sabine Pass LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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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 Liquefaction, LLC
  • Parent: Cheniere Energy
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Capacity: 30.4 mtpa[1]
  • Status: Operating[1]
  • Type: Import[1]
  • Start Year: 2008[1]

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

Project Details, Export Terminal

Trains 1 & 2

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

Trains 3 & 4

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

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

Train 5

  • Owner: Sabine Pass Liquefaction, LLC
  • Parent: Cheniere Energy[2]
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Type: Export[2]
  • Trains: 1[2]
  • Capacity: 5 mtpa[3]
  • Status: Operating[4]
  • Start Year: 2018[5]

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

Train 6

  • Owner: Sabine Pass Liquefaction, LLC
  • Parent: Cheniere Energy [2]
  • Location: Cameron Parish, Louisiana, United States
  • Coordinates: 29.7438551,-93.8770901
  • Type: Export[2]
  • Trains: 1[2]
  • Capacity: 4.5 mtpa[2]
  • Status: Construction[6]
  • Start Year: 2023[2]
  • Financing: US$1.5 billion in loans from a consortium of international banks advised by Mitsubishi UFG and Societé Générale[7]

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

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.[8]

In February 2016 Sabine Pass made its first LNG shipment.[9] It was the first LNG shipment from the lower 48 states.[10] It rode on an Asian Vision tanker with the capacity to transport 3.39 billion cubic feet of LNG.[11] 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.[12]

Gail India has agreed to buy 3.5 million metric tons of LNG a year over the next two decades from Sabine Pass.[13]

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.[14]

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.[15][16]

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."[15]

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.[17]

Financing, 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.[18]
  • Debt financing of US$1 billion in 2013 from 19 international commercial banks.[19]
  • Debt financing of US$5.9 billion in 2013 from Export-Import Bank of Korea, Korea Trade Insurance Corporation and 26 international commercial banks.[20]
  • Debt financing of US$325 million in 2014 from Scotiabank, Mizuho, Standard Chartered, Lloyds, Crédit Agricole, Mitsubishi UFG and Société Générale.[21]
  • 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.[22]
  • A US$2 billion bond issue in 2015 involving 15 international commercial bank participants.[23]
  • Two bond issues in 2016 totalling US$3 billion and featuring a range of international commercial bank participants.[24] [25]
  • Two bond issues in 2017 totalling US$2.15 billion and featuring a range of international commercial bank participants.[26] [27]

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.[28][29][4][7]

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.[30]

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.[31] 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.[32]

Financing, 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.[33]
  • 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.[34]


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.[35] The company also tapped the bond markets for US$2 billion in May 2020 to pay down outstanding debt at Sabine Pass[36], and further received a US$2.62 billion loan in June 2020 to repay debt on Sabine Pass and its Corpus Christi LNG Terminal.[37]

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.[38]

Articles and resources

References

  1. 1.0 1.1 1.2 1.3 The LNG Industry: Annual Report 2020, page 48, International Group of Liquefied Natural Gas Importers, accessed April 29, 2020
  2. 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2020 World LNG Report, page 102, International Gas Union, April 27, 2020
  3. 3.0 3.1 3.2 "GIIGNL 2021 Annual Report”, page 41, GIIGNL, accessed May 4, 2021.
  4. 4.0 4.1 Cheniere requests to introduce feed gas to Sabine Pass LNG train 5 LNG World News, August 29, 2018.
  5. U.S. Liquefaction Capacity, Energy Information Administration, November 3, 2020
  6. Why Is Cheniere Energy (LNG) Down 31% Since Last Earnings Report? Yahoo Finance, Mar. 26, 2020.
  7. 7.0 7.1 Houston LNG exporter to seek $1.5B in debt funding Houston Business Journal, Sep. 10, 2019.
  8. "BC’S Carbon Pollution Could Double with LNG Plants" Tarika Powell, Sightline Institute, June 7, 2017.
  9. Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Forbes, March 7, 2016.
  10. Harry Weber and Naureen Malik "Cheniere Loading Tanker With First U.S. Shale Gas for Export" Bloomberg, February 23, 2016.
  11. Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Forbes, March 7, 2016.
  12. Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Forbes, March 7, 2016.
  13. Tim Daiss"EIA Report Sounds Somber Note For U.S. LNG" Bloomberg, March 7, 2016.
  14. Naureen Malik and Stephen Cunningham"U.S. Looks Set to Export First LNG on Canada's Behalf" Bloomberg, February 28, 2017.
  15. 15.0 15.1 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.
  16. "Sabine Pass Liquefaction Project, Louisiana, USA" Bechtel, accessed October 21, 2015.
  17. Enviros File DOE Protest Over Cheniere LNG Export Project Law360, April 20, 2012
  18. Sabine Pass LNG Terminal Additional Facility 2012 IJGlobal, accessed May 26, 2020
  19. Sabine Pass LNG Terminal Additional Facility 2013 IJGlobal, accessed May 26, 2020
  20. Sabine Pass LNG Train 3 and 4 Financing IJGlobal, accessed May 26, 2020
  21. Sabine Pass Liquefaction Train L/C Facility 2014 IJGlobal, accessed May 26, 2020
  22. Sabine Pass LNG Train Additional Facility 2014 IJGlobal, accessed May 26, 2020
  23. Sabine Pass LNG Bond Issue 2015 IJGlobal, accessed May 26, 2020
  24. Sabine Pass LNG Bond Facility 2016, IJGlobal, accessed May 26, 2010
  25. Sabine Pass LNG Bond Facility 2 2016, IJGlobal, accessed May 26, 2020
  26. Sabine Pass Liquefaction Bond Facility 1 2017 IJGlobal, accessed May 26, 2010
  27. Sabine Pass Liquefaction Bond Facility 2 2017, IJGlobal, accessed May 26, 2020
  28. Trains 5 & 6 Cheniere, accessed July 17, 2019.
  29. Sergio Chapa,Cheniere Energy inks deals to support two expansion projects Houston Chronicle, June 3, 2019.
  30. "Why Is Cheniere Energy (LNG) Down 31% Since Last Earnings Report?", Yahoo! Finance, March 26, 2020.
  31. Sabrina Valle, Scott DiSavino, "Cheniere tops second-quarter profit estimates, accelerates LNG plant expansion", Reuters, Aug. 6, 2020
  32. Harry Weber, Ross Wyeno, "Forward spreads point to further upside for early startup of new US LNG capacity", S&P Global, May 24, 2021
  33. Sabine Pass LNG Train 5 Financing and Trains 1,2,3 & 4 Refinancing IJGlobal, accessed May 26, 2020
  34. Sabine Pass LNG Terminal Additional Facility 2019 IJGlobal, accessed May 26, 2020
  35. Sabine Pass LNG Refinancing 2020 IJGlobal, accessed May 26, 2020
  36. Sabine Pass LNG Refinancing 2020 (2) IJGlobal, accessed Oct. 5, 2020
  37. Sabine Pass and Corpus Christi LNG Refinancing 2020 IJGlobal, accessed Oct. 5, 2020
  38. Harry Weber, Cheniere's Sabine Pass works to resume production at US facility following storm S&P Global, Aug. 31 2020