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LNG Success

During the shale revolution operators were finding gas faster than traditional domestic markets could absorb it. Consequently, some investors saw LNG (Liquefied Natural Gas) exports as a lucrative opportunity.  Liquefaction, transportation and regasification facilities are capital intensive and require long lead times for construction.  While a number of projects are currently underway in the U. S., Cheniere Energy’s Sabine Pass, Louisiana, plant was the first one to begin operating.

“World Oil” reports that since start-up a year ago both throughput and prices have increased. Two production trains are already operational, a third is in the process of starting up, with a fourth scheduled for later this year.  In January and February fifteen tankers departed Sabine Pass, the most since operations began.   Last year’s highest price received was $6.21 per Million British Thermal Units (MMBTU).  However, by January of this year, cargoes destined for Mexico, Japan and Jordan were getting $7.52 per MMBTU, the best price yet.

So far the Sabine Pass facility has exported LNG to more than a dozen countries, some as far away as China, and others as close as Mexico. If all continues as planned, the U. S. will become a net exporter of LNG by next year.

Jason Feer with ship broker Poten & Partners, observed that Sabine Pass “ramped up faster than expected, so it seems like a pretty successful launch into commercial operation. The prices have been fairly strong.  For Cheniere Marketing that’s been good to see.”

The international LNG market is highly competitive with a number of established, as well as emerging, players. However, it looks like the U. S. in general, and Cheniere Energy in particular, is off to a good start.

To read the article in its entirety, please go to http://www.worldoil.com/news/2017/3/20/americas-shale-gas-selling-at-record-prices-to-overseas-buyers .

Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide.  Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.