Liquefaction

Units of Kinder Morgan’s El Paso Pipeline Partners LP business said that during recent open seasons, plenty of customers stepped up for incremental long-term transportation capacity from the Marcellus Shale region to serve markets in Georgia, South Carolina and northern Florida.

If Houston-based LNG Central has its way, not all of the liquefied natural gas (LNG) output of Cheniere Energy’s Sabine Pass liquefaction and export project on the Gulf Coast will be shipped overseas. Some will be used to fuel the domestic marine market as well as transportation on land and the high-horsepower engine market.

If Houston-based LNG Central has its way, not all of the liquefied natural gas (LNG) output of Cheniere Energy’s Sabine Pass liquefaction and export project on the Gulf Coast will be shipped overseas. Some will be used to fuel the domestic marine market as well as transportation on land and the high-horsepower engine market.

Cheniere Energy Partners LP CEO Charif Souki said trains 3 and 4 of the Sabine Pass Liquefaction Project, which is being developed adjacent to the Sabine Pass LNG terminal, will be constructed after all milestones were completed on the first four liquefied natural gas (LNG) trains being developed. Cheniere, he said, expects to complete all of the “required resource reports” for trains 5 and 6 to file an application with the Federal Energy Regulatory Commission by September (see Daily GPI, March 7). Cheniere has secured the credit facility necessary for trains 3 and 4 (see Daily GPI, May 23). First LNG is slated for delivery by late 2015.

A company based in India is mulling a $3 billion liquefied natural gas (LNG) liquefaction and export terminal in the Strait of Canso in Nova Scotia, Canada’s CBC News reported. “We’re looking at a long term…facility to liquefy natural gas. We’re looking to put out a capacity of a billion and a half cubic feet a day at its final stage, said Darshan Hiranandani, managing director for H-Energy, as reported by CBC. He said the facility could be similar in scale to the Canaport LNG facility in New Brunswick. Construction could be completed by 2020 at the earliest, he said. The proposal is the second for an LNG facility in Nova Scotia. Last fall, Pieridae Energy Canada announced a project whose target markets would be in Europe and India (see Daily GPI, Oct. 29, 2012).

General Electric unit GE Oil & Gas Wednesday said it has been awarded contracts to supply natural gas compression trains for Dominion Cove Point’s liquefaction project in Lusby, MD, which would give the existing import terminal export capability.

Global liquefied natural gas (LNG) supplies are tight and expected to remain so for a while as liquefaction projects in progress wrestle with delays and those being planned face an environment of escalating costs. However, there’s plenty of gas to liquefy in Australia, the United States (thank you, shales) and elsewhere. And there’s growing demand as gas is becoming the “fuel of choice” around the world.

Britain’s Centrica plc has struck a 20-year sale and purchase agreement with Cheniere Energy Partners LP’s Sabine Pass Liquefaction LLC for 1.75 million metric tons per annum (mmtpa) of liquefied natural gas (LNG) with deliveries to begin as early as 2018. The contracted amount is equivalent to 91,250,000 MMBtu/year and with Sabine’s contract with Total Gas & Power North America Inc. (see NGI, Dec. 24, 2012), brings Train 5 contracted volumes to 3.75 mmtpa. Centrica, Sabine’s sixth LNG export customer, is to buy LNG on a free on board basis at a Henry Hub indexed price, plus a fixed component,. The 20-year contract, contingent on regulatory and financing approvals, begins on the date of first commercial delivery from Train 5 and has an extension option of up to 10 years. Centrica businesses include British Gas, which serves about 12 million homes in Britain, nearly half of the country’s homes, and Direct Energy, which has businesses in natural gas production, power generation and distribution in North America.

Cheniere Energy Inc. unit Sabine Pass Liquefaction LLC has applied to the U.S. Department of Energy to export additional volumes from its planned terminal in Cameron Parish, LA. Sabine Pass is seeking authorization to export to both free trade agreement (FTA) and non-FTA countries the equivalent of 101 Bcf per year in support of a contract it struck last December with Total Gas & Power North America Inc. (see Daily GPI, Dec. 18, 2012). The term of the 20-year agreement begins upon the first commercial delivery for the project’s fifth train and has an extension option of up to 10 years. However, Sabine Pass said it is not obligated to serve the Total contract from train five and may use whatever capacity is available at the facility. Recently, Sabine Pass and related companies filed at the Federal Energy Regulatory Commission to set in motion the approval process for the project’s fifth and sixth trains (see Daily GPI, March 7).