After years of development, the commissioning and startup of the first of the export trains at Cheniere’s Sabine Pass LNG terminal has launched at last the era of LNG exports from the continental U.S. And while global natural gas and LNG prices are at long-term lows, the reality is that multiple U.S.-based export facilities like Dominion’s Cove Point project, Sempra’s Cameron LNG facility and Cheniere’s greenfield export plant at Corpus Christi will continue to move ahead in the coming years, further underlining this important trend.
Lost in the excitement of the conversion of former LNG import facilities into export plants has been the continuation of this country’s ongoing (albeit greatly curtailed) role as an LNG importer. Lest we forget, the last wave of North American LNG-related excitement was spurred by grandiose visions of the U.S. emerging as a major new importer. While that vision has been rendered moot by the shale revolution, the U.S. will continue in its role as an LNG importer for some time. What is important to watch will be to what degree this future role is dominated by one facility, one player and one source.
The trend of imports to the U.S. (via land-based regasification facilities only) has seen a thorough decline even since 2012, dropping from 174 billion cubic feet (Bcf) to 88 Bcf last year. As total imports have fallen, so have the roles of certain plants. Although commissioned only within the last several years, facilities like Golden Pass, Cameron and Gulf LNG have seen practically no volumes, while Sabine Pass and Freeport have seen small amounts. The exceptions, ironically, are the older facilities, including Kinder Morgan’s Elba Island terminal and Dominion’s Cove Point facility.
The most important, however, remains the Distrigas facility in Everett, Mass. Although it too has seen total volumes decline, thanks to its vital role in supporting New England’s limited natural gas grid, the terminal remains far and away the most active import facility in the country. Given challenges in developing more robust pipeline capacity into the region, it appears this role will continue for quite some time. It should be no surprise then that in every year since 2012, at least half of all imported volumes have been brought in by Engie (formerly GDF Suez), the terminal’s owner.
Concurrent with the leading role exhibited by Engie and Distrigas in the LNG market is the increasing primacy of Trinidad and Tobago as the source for the lion’s share of imports. The nation’s role in the LNG import mix to the U.S. has remained particularly robust. Indeed, despite occasional significant volumes from Qatar, Norway and even Yemen, Trinidad has been responsible for 72% of all imports into land-based regasification facilities in that time.
These volumes are driven by GDF Suez’s twin contracts for a total of 1.97 million tonnes per annum from Trinidad’s Atlantic LNG. Thus far, 2016 has borne out these trends, with the 21.6 Bcf imported in the first quarter coming entirely from Trinidad and through the Distrigas terminal. With these contracts set to expire only in 2022 and 2024, it seems likely that the trinity of Engie, Distrigas and Trinidad will form the core of U.S. LNG imports for the foreseeable future.
Recommended Reading
Darbonne: The ESG Sword: BlackRock's Life, Death by ESG
2024-04-17 - BlackRock, the $10 trillion investment manager, is getting heat for too much ESG investing, while shareholders are complaining it’s doing too little.
Fire Closes Atlas Energy’s Kermit, Texas Mining Facility
2024-04-15 - Atlas Energy Solutions said no injuries were reported and the closing of the mine would not affect services to the company’s Permian Basin customers.
Coalition Launches Decarbonization Program in Major US Cities, Counties
2024-04-11 - A national coalition will start decarbonization efforts in nine U.S. cities and counties following a federal award of $20 billion “green bank” grants.
Exclusive: Scepter CEO: Methane Emissions Detection Saves on Cost
2024-04-08 - Methane emissions detection saves on cost and "can pay for itself," Scepter CEO Phillip Father says in this Hart Energy exclusive interview.
Majority of Recent CO2 Emissions Linked to 57 Producers - Report
2024-04-03 - The world's top three CO2-emitting companies in the period were state-owned oil firm Saudi Aramco, Russia's state-owned energy giant Gazprom and state-owned producer Coal India, the report said.