Cheniere plans final investment decision on U.S. LNG project within 30 days
Cheniere eyes Corpus FID in 30 days
Cheniere expects to sell 2 mtpa more this year
Sabine Pass expansion FID seen this year (Adds detail, quotes throughout))
Cheniere aims to take a final investment decision on its planned Corpus Christi liquefied natural gas (LNG) export project in the United States within the next 30 days, undeterred by weak oil and gas prices worldwide.
Ramzi Mroueh, vice-president of origination at Cheniere International, said Cheniere had agreed financing for Corpus Christi and sealed a $9.5 billion engineering, procurement and construction contract with engineering firm Bechtel.
“We expect to sell another 2 million tonnes (of LNG supply from the project) by the end of the year,” he said.
Cheniere is already building the United States’ first LNG export plant at Sabine Pass, Louisiana, which is due to come on stream towards the end of the year.
A final decision on an additional two production trains at Sabine Pass LNG export project in the United States this year, specifically trains five and six, Mroueh said.
The moves suggest that weak oil and gas prices are failing to dent the boom in U.S. LNG export projects, spurred by massive gas supply growth from shale drilling in recent years.
“There is still strong interest in the market for our product despite slowdown and low oil prices,” he said.
“We will be the biggest LNG producer in the Atlantic ... with 40 million tonnes of annual production,” once Sabine Pass and Corpus Christi are built, he added.
A near halving in oil prices since June 2014 had stirred unease about the future competitiveness of U.S. LNG, since Asian production plants sell their supply at oil-linked prices.
Asian buyers of U.S. LNG may opt to leave their export capacity unutilized at times when oil-indexed LNG from other sources looked cheaper.
In those instances buyers will still incur a liquefaction fee levied by Cheniere, roughly equivalent to $10 million per cargo, even if no exports take place.
“There will be some periods when that liquefaction fee will not be recovered, but over a 20 year period it will be,” he said, although much will depend on the oil price.
The onset of U.S. LNG output will bring totally flexible supply, divertible at the buyers behest, into the hands of a large number of players that will make trading within the Atlantic very efficient and liquid, he said.
“The U.S. will be a major player in the LNG industry, it will have a profound change in how LNG is traded. We think there is more to come,” Mroueh said.
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