A proposed fourth liquefied natural gas (LNG) production unit at the Freeport LNG facility on the Texas coast has been approved for exports to markets around the world.
The LNG project received approval Monday from the U.S. Department of Energy (DOE) to export volumes from Train 4 at the existing liquefaction and export facility on Quintana Island, near Freeport. The company earlier this month received approval from FERC to site, construct and operate its fourth train.
“We appreciate the Department of Energy’s swift approval, closely coupled with the recent Federal Energy Regulatory Commission approval, which enables us to further advance our project development and marketing efforts for Train 4,” CEO Michael Smith said. “Having DOE’s approval marks another significant milestone for Freeport LNG, which brings us one step closer to our goal of moving ahead with Train 4 construction later this year.”
The fourth train would add more than 5 million metric tons/year (mmty) to its existing project, increasing the total export capability to more than 20 mmty. Roughly 13.5 mmty of the capacity has been contracted under 20-year tolling agreements to Osaka Gas Trading & Export LLC, Jera Energy America LLC, BP plc, Toshiba America LNG Corp. and SK E&S LNG LLC. About 0.5 mmty has been contracted to Trafigura PTE Ltd. under a three-year sale and purchase agreement that begins in 2020.
Operations from the fourth production unit are expected to begin in 2023. Freeport’s export facility currently consists of Train 1, scheduled for commercial startup in 3Q2019, with full three-train commercial operations expected by mid-2020.
Under three-train operations, Freeport’s facility would rank seventh in global liquefaction production capacity, according to the company, with the facility rising to become the world’s fifth largest producer once Train 4 is completed.
“Increasing export capacity from the Freeport LNG project is critical to spreading freedom gas throughout the world by giving America’s allies a diverse and affordable source of clean energy,” said U.S. Under Secretary of Energy Mark W. Menezes. “Further, more exports of U.S. LNG to the world means more U.S. jobs and more domestic economic growth and cleaner air here at home and around the globe.”
Farther east in Hackberry, LA, Cameron LNG has begun commissioning cargoes ahead of its first exports. Genscape Inc. told NGI that the “Marvel Crane” vessel arrived empty at Cameron LNG on Tuesday and was still at berth midday Wednesday.
Last week, Genscape said the “BW Everett” was also headed for Sempra Energy’s liquefaction facility; the tanker entered the Gulf of Mexico Wednesday morning, according to Genscape LNG analyst Allison Hurley.
“Farther out, our team can also confirm that ”Shinshu Maru’ is currently in the northern Atlantic with destination listed as “CAMERON,” Hurley said.
Cameron LNG achieved first production earlier this month at the first of three planned trains that would enable the export of 12 mmty. Completion of the second and third trains has been pushed back to the first half of 2020, with longer construction schedules and commissioning for those units, Sempra management said during a quarterly conference call earlier this month.
Cameron LNG joins the Freeport project as well as Cheniere Energy Inc.’s Sabine Pass and Corpus Christi export facilities along the Gulf Coast.
The United States is expected to lead capacity growth in the global LNG liquefaction and regasification industries from planned and announced (new-build) projects, respectively during the outlook period 2019-2023, according to GlobalData. The U.S.’ new-build liquefaction capacity is expected to grow from 26.1 mmty in 2019 to 210.3 mmty in 2023, although it’s almost certain not all of the announced projects will get built.
Of the total capacity expected to come online in 2023, 94 mmty is expected to come from planned projects that have received required approvals for development, while the remaining 116.3 mmty could come from early-stage announced projects that have yet to receive any approvals for development, the data and analytics company said.
“Booming natural gas production from shale plays is driving the US LNG liquefaction capacity growth,” GlobalData oil and gas analyst Soorya Tejomoortula said. “The expected LNG exports from these liquefaction terminals are giving serious competition to established players such as Australia and Qatar.”
After the United States, Qatar and Canada rank second and third, with capacities of 32 mmty and 29 mmty, respectively, from new-build liquefaction projects in 2023.
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