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Cheniere's Sabine Pass LNG Terminal, Pipeline Set to Go

Cheniere Energy has received authorization for commissioning activities at its new Sabine Pass LNG terminal and to put its Sabine Pass pipeline segment into service in advance of the rest of the new Creole Trail line as part of the commissioning activities. Several LNG cargoes are expected to be delivered into the Sabine Pass terminal from Nigeria in late March or early April.

Service through the remaining segment of the Creole Trail line will occur at a later date, the company told the Federal Energy Regulatory Commission (FERC). The FERC approval for the Sabine Pass LNG terminal service was issued March 14 and the advance Sabine Pass pipeline segment service authorization was published March 18.

The Sabine Pass terminal, designed with a peak sendout capacity of 4.3 Bcf/d, is scheduled to ramp up with an initial send-out capacity of 2.6 Bcf/d. Capacity at the terminal has been contracted under 20-year agreements: 2.0 Bcf/d by Cheniere Marketing and 1.0 Bcf/d each by Total Gas & Power North America Inc. and Chevron U.S.A. Inc. The terminal will provide the necessary linepack for the 94-mile Sabine Pass pipeline segment.

In October FERC approved the merger of the affiliated Cheniere Creole Trail and Cheniere Sabine Pass pipelines into a single line to serve two liquefied natural gas (LNG) terminals in Cameron Parish, LA. Creole Trail is to operate as an integrated 150.9-mile, 42-inch diameter system with a capacity of 2 Bcf/d, serving the proposed Cheniere Energy Creole Trail LNG terminal and Cheniere's Sabine Pass terminal. While the Sabine Pass terminal, certificated in 2004, is ready for service, the fully permitted Creole Trail terminal is "waiting on commercial need" to begin construction.

The Sabine Pass pipeline segment is a 94-mile, 42-inch diameter pipeline going north to connect with a number of interstate take-away lines and storage facilities.

A Cheniere Energy executive recently predicted that the United States would soon be pulling down its share of the world LNG market. Davis Thames, president of Cheniere Marketing Inc., an affiliate of Cheniere Energy Inc., nevertheless confirmed that the company is examining the options for its Sabine Pass terminal, including a possible sale. Thames said management believes Cheniere is undervalued by a market that doesn't see the worth of other projects it has on the boards. Monetizing the Sabine terminal would provide capital for other development, Thames said (see NGI, March 17).

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