Released February 25, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Having recently announced substantial completion of its latest liquefied natural gas (LNG) production train at the Sabine Pass facility in Louisiana, the U.S.' top LNG exporter, Cheniere Energy Incorporated (Houston, Texas), isn't about to take a break. On the table is the Corpus Christi Stage 3 project in Texas, a seven-train plant to produce and export 9.5 million metric tons of LNG per year. In a Thursday conference call, Cheniere Chief Executive Officer Jack Fusco said, "It's all coming together, and we look forward to continuing to deliver world-class execution on Stage 3."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for the detailed report on the Stage 3 project.
"We successfully executed a variety of long-term contracts to put Stage 3 on a path to FID [final investment decision] this year," said Fusco. One of the more important of these contracts was announced Thursday, before the conference call. In the contract, Cheniere and natural gas producer EOG Resources Incorporated (NYSE:EOG) (Houston) amended their long-term gas supply agreement, with EOG agreeing to sell 420,000 million British thermal units (MMBtu) of natural gas per day to the Stage 3 project for a period of 15 years. In addition, a previously executed supply agreement, under which EOG will sell 300,000 MMBtu per day to Stage 3, has been extended to 15 years. As a result, EOG will supply a total of 720,000 MMBtu to the Stage 3 plant under a 15-year contract, expected to start and ramp up once the plant begins operations.
Fusco said, "Our commercial success in 2021, coupled with the continued momentum demonstrated by the EOG agreement we just announced, as well as recent market dynamics, has brought Stage 3 even more into focus, and we remain confident in a mid-year FID." Fusco said Cheniere was working closely with its preferred engineering, procurement and construction (EPC) firm, Bechtel Corporation (Reston, Virginia), to finalize the EPC contract for the Stage 3 project and expects to conclude that process soon.
The 2021 success Fusco refers to is not without basis. Substantial completion was declared for Train 3 of Cheniere's existing Corpus Christi plant in the first quarter of 2021, followed by the announcement of completion of Stage 6 at Sabine Pass earlier this month. "With the addition of these two trains," said Fusco, "we have now completed our initial nine-train platform safely, ahead of schedule and on budget. We now process over 7 Bcf [billion cubic feet] per day, or approximately 7%, of the total gas production in the U.S., and we do so every day, with near-perfect scheduling efficiency."
Markets for U.S. LNG are certainly picking up, especially as the conflict between Ukraine and Russia, which supplies 35%-40% of Europe's gas, continues to escalate. Record European LNG demand has driven U.S. LNG exports to record highs, with Europe accounting for the majority of U.S. exports since December. That month, gas flowing to U.S. LNG export plants hit a record 12.2 Bcf/d, close to maximum processing capacity in the U.S. And with the increasing military action and uncertainty regarding Russian gas exports to Europe, this is showing no signs of abating.
Cheniere's trading volumes were up for both the just-passed quarter and full-year 2021. Cheniere increased its number of cargos shipped in 2021 to 566, up from 391 in 2020. LNG volumes loaded rose from 1,384 trillion British thermal units (TBtu) in 2020 to 2,015 TBtu in 2021, a 46% increase.
In Thursday's conference call, Anatol Feygin, Cheniere's chief commercial officer, spoke of the growing global demand for LNG and Cheniere's role in that. "Last year saw 5% growth in LNG imports compared to 2020, taking total trade to 374 million tons. This 18 million-ton year-over-year growth took LNG trade figures to well above pre-pandemic levels. Virtually all the supply growth came from the U.S., which exported an additional 23 million tons year over year. Impressively, Cheniere was responsible for half of that U.S. volume growth."
With global dynamics changing rapidly and a new project moving closer to fruition, Cheniere may be able to have similar bragging rights in coming years as the seven trains of Corpus Christi Stage 3 are brought online, a process expected to be completed by 2027.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for the detailed report on the Stage 3 project.
"We successfully executed a variety of long-term contracts to put Stage 3 on a path to FID [final investment decision] this year," said Fusco. One of the more important of these contracts was announced Thursday, before the conference call. In the contract, Cheniere and natural gas producer EOG Resources Incorporated (NYSE:EOG) (Houston) amended their long-term gas supply agreement, with EOG agreeing to sell 420,000 million British thermal units (MMBtu) of natural gas per day to the Stage 3 project for a period of 15 years. In addition, a previously executed supply agreement, under which EOG will sell 300,000 MMBtu per day to Stage 3, has been extended to 15 years. As a result, EOG will supply a total of 720,000 MMBtu to the Stage 3 plant under a 15-year contract, expected to start and ramp up once the plant begins operations.
Fusco said, "Our commercial success in 2021, coupled with the continued momentum demonstrated by the EOG agreement we just announced, as well as recent market dynamics, has brought Stage 3 even more into focus, and we remain confident in a mid-year FID." Fusco said Cheniere was working closely with its preferred engineering, procurement and construction (EPC) firm, Bechtel Corporation (Reston, Virginia), to finalize the EPC contract for the Stage 3 project and expects to conclude that process soon.
The 2021 success Fusco refers to is not without basis. Substantial completion was declared for Train 3 of Cheniere's existing Corpus Christi plant in the first quarter of 2021, followed by the announcement of completion of Stage 6 at Sabine Pass earlier this month. "With the addition of these two trains," said Fusco, "we have now completed our initial nine-train platform safely, ahead of schedule and on budget. We now process over 7 Bcf [billion cubic feet] per day, or approximately 7%, of the total gas production in the U.S., and we do so every day, with near-perfect scheduling efficiency."
Markets for U.S. LNG are certainly picking up, especially as the conflict between Ukraine and Russia, which supplies 35%-40% of Europe's gas, continues to escalate. Record European LNG demand has driven U.S. LNG exports to record highs, with Europe accounting for the majority of U.S. exports since December. That month, gas flowing to U.S. LNG export plants hit a record 12.2 Bcf/d, close to maximum processing capacity in the U.S. And with the increasing military action and uncertainty regarding Russian gas exports to Europe, this is showing no signs of abating.
Cheniere's trading volumes were up for both the just-passed quarter and full-year 2021. Cheniere increased its number of cargos shipped in 2021 to 566, up from 391 in 2020. LNG volumes loaded rose from 1,384 trillion British thermal units (TBtu) in 2020 to 2,015 TBtu in 2021, a 46% increase.
In Thursday's conference call, Anatol Feygin, Cheniere's chief commercial officer, spoke of the growing global demand for LNG and Cheniere's role in that. "Last year saw 5% growth in LNG imports compared to 2020, taking total trade to 374 million tons. This 18 million-ton year-over-year growth took LNG trade figures to well above pre-pandemic levels. Virtually all the supply growth came from the U.S., which exported an additional 23 million tons year over year. Impressively, Cheniere was responsible for half of that U.S. volume growth."
With global dynamics changing rapidly and a new project moving closer to fruition, Cheniere may be able to have similar bragging rights in coming years as the seven trains of Corpus Christi Stage 3 are brought online, a process expected to be completed by 2027.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
