Cameron LNG Liquefaction-Export Facility Begins Production At Train 2

Press release as follows:

Sempra LNG, a subsidiary of Sempra Energy, today announced that Cameron LNG has begun producing liquefied natural gas (LNG) from the second liquefaction train of the export facility in Hackberry, Louisiana.  

"We are pleased to reach this important milestone in the development of the liquefaction facility," said Lisa Glatch, chief operating officer of Sempra LNG and board chair for Cameron LNG.

Train 2 and Train 3 are expected to commence commercial operations under Cameron LNG's tolling agreements in the first and third quarter of 2020, respectively. The facility's first liquefaction train started commercial operations in August 2019.

Phase 1 of the Cameron LNG export project includes the first three liquefaction trains that will enable the export of approximately 12 million tonnes per annum (Mtpa) of LNG, or approximately 1.7 billion cubic feet per day.

Cameron LNG is jointly owned by affiliates of Sempra LNG, Total, Mitsui & Co., Ltd., and Japan LNG Investment, LLC, a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha (NYK). Sempra Energy indirectly owns 50.2% of Cameron LNG.

Sempra Energy is also developing other LNG export projects in North America, including Cameron LNG Phase 2, previously authorized by the Federal Energy Regulatory Commission, which could include up to two additional liquefaction trains and up to two additional LNG storage tanks; Port Arthur LNG in Texas; and Energía Costa Azul (ECA) LNG Phase 1 and Phase 2 in Mexico.

Development of any of these LNG export projects is contingent upon obtaining binding customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing, other factors, and reaching final investment decisions. In addition, the ability to successfully complete construction projects, such as the Cameron LNG export project, is subject to a number of risks and uncertainties.

Sempra LNG develops and builds natural gas liquefaction facilities and is pursuing the development of five strategically located LNG projects in North America with a goal of delivering 45 Mtpa of clean natural gas to the largest world markets.

See also:
Cameron LNG Commences Commercial Operations For Train 1 Of Liquefaction-Export Project

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Cameron LNG Commences Commercial Operations For Train 1 Of Liquefaction-Export Project

• Cameron LNG to Start Recognizing Revenues from Train 1
• Sempra Energy's Share of Full-Year Run-Rate Earnings from the First Three Trains are Projected to be Between $400 Million and $450 Million Annually

Press release as follows:

Sempra LNG, a Sempra Energy subsidiary, today announced that Cameron LNG's first train of the liquefaction-export project in Hackberry, Loiusiana, has begun commercial operations under Cameron LNG's tolling agreements.

"This is an exciting moment for Cameron LNG and for Sempra Energy," said Carlos Ruiz Sacristan, chairman and CEO of Sempra North American Infrastructure. "Cameron LNG is exporting liquefied natural gas (LNG) to customers in the largest world markets, helping to support economic growth in the U.S. and abroad."

Sempra Energy's share of full-year run-rate earnings from the first three trains at Cameron LNG are projected to be between $400 million and $450 million annually when all three trains achieve commercial operations under Cameron LNG's tolling agreements.

"We are proud that Cameron LNG has realized this key milestone with an excellent safety record and zero lost-time incidents," said Lisa Glatch, chief operating officer of Sempra LNG and board chair for Cameron LNG. "We remain focused on safely achieving commercial operations of Train 2 and Train 3."

Train 1 is part of Phase 1 of the Cameron LNG liquefaction-export project which includes a projected export capacity of 12 million tonnes per annum (Mtpa) of LNG, or approximately 1.7 billion cubic feet per day of natural gas.

Cameron LNG is jointly owned by affiliates of Sempra LNG, Total, Mitsui & Co., Ltd., and Japan LNG Investment, LLC, a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha (NYK). Sempra Energy indirectly owns 50.2% of Cameron LNG. 

Cameron LNG Phase 1 is one of five LNG export projects Sempra Energy is developing in North America: Cameron LNG Phase 2, previously authorized by FERC, encompasses up to two additional liquefaction trains and up to two additional LNG storage tanks, Port Arthur LNG in Texas and Energía Costa Azul LNG Phase 1 and Phase 2 in Mexico.

Development of Sempra Energy's LNG export projects is contingent upon obtaining binding customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing, other factors, and reaching final investment decisions. In addition, the ability to successfully complete construction projects, such as the Cameron LNG facility, is subject to a number of risks and uncertainties.

Sempra LNG develops, builds and invests in natural gas liquefaction facilities and is pursuing the development of five strategically located LNG projects in North America with a goal of delivering 45 Mtpa of clean natural gas to the largest world markets, which would make Sempra Energy one of North America's largest developers of LNG-export facilities.

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US LNG: a snapshot of where things stand in 2018

US shale has been a game changer for the gas markets. Often overshadowed by oil story, US gas production is the unloved sibling of oil – oversupplied, low prices, unprofitable and sometimes an unwanted by-product of oil production in the form of associated gas.

However 2017 came to demonstrate the vast potential for US gas and a complete change in direction with the country becoming a net exporter of gas for the first time. This started with first export from Sabine Pass LNG in 2016 which has now grown to four liquefaction trains with trains 5 in the works.  LNG export capacity could reach 8-9bcf/d in 2020 up from the current 2bcf/d, with additional facilities already under construction:

• Cove Point commenced feed gas at the end of 2017
• Elba Island Phase I will come onstream in H1 2018 and Phase II in H1 2019
• Freeport train 1 is planned for operation in 2018 with subsequent trains coming online throughout the rest of 2018 and 2019
• Corpus Christi and Cameron will also come online towards the end of this decade

Source: EIA

US LNG has been somewhat of a disruptor – it has brought destination flexibility and shorter-term procurement to the market that was once characterised by entirely long-term, oil-price linked offtake. This will shake up the market place and how LNG sourcing will evolve is yet to be understood.

Asia is slated to be the big winner with this extra source of gas with South Korea, Japan and China being the largest importers. This is all helped by the recent expansion of the Panama Canal, enabling LNG from the US east coast to Asia with a cheaper and 11 day shorter journey time. This puts into question whether any US west coast and Canadian LNG projects will take off – very likely no in the near-term. The east coast’s proximity to upstream gas, existing pipeline infrastructure to get gas to liquefaction plants and adapted docks means it remains an advantageous location to host LNG terminals.

Related post: Canadian LNG: Wrong place wrong time for Petronas

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