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Cheniere $10 billion LNG Terminal project turns to Export

Sabine Pass LNG Terminal opens overseas export to Shale gas production

Originally planned to be a LNG  Import Terminal the Sabine Pass LNG project in Lousianna,USA, had been left in stand by for a while, until the Shale gas industry managed to put the domestic gas prices down below $4 per mmBTU with a great future to stay that low.

With this LNG Export Terminal, Cheniere Energy (Cheniere) expects to sell gas in Asia below $9 per mmBTU when the long term agreement, the so called JCC contracts, are usually based on $17 per mmBTU.

The Gulf Coast and Midcontinent regions contain five of the six Major US shale plays, including the Barnett, Haynesville, Woodford, Fayetteville/Arkoma, and Eagle Ford, and three of the largest tight-sands plays, including the East Texas, Anadarko and Gulf Coast plays.

The natural gas productive capacity in this region therefore represents a major portion of current and future production in USA.

Then Cheniere decided to redesign their Sabine Pass LNG project from import to become bi-directional

Cheniere proposes to install liquefaction services at the Sabine Pass receiving terminal in Cameron Parish, Louisiana, USA.  Adding liquefaction capabilities will transform the Sabine Pass LNG terminal into a bi-directional facility capable of liquefying and exporting natural gas in addition to importing and regasifying foreign-sourced LNG.

Due to the abundance of supply and the existing pipeline infrastructure in both Texas and Louisiana, Cheniere believes it can provide an additional outlet for U.S. natural gas production while offering a stable source of supply for global buyers.

ConocoPhillips Cascade Technology for the LNG Trains

The Sabine Pass LNG project will include up to

 – 4 LNG trains

 – 2 Bcf/d of natural gas total processing capacity

 – 4.5 million t/y nominal capacity per train

 – ConocoPhillips Cascade technology

 – 6 GE LM2500+G4 gas turbines driven refrigerant compressor per train.

 – SAC water injection for emission control

 – Gas turbine inlet air humidification

– BASF aMDEA acid gas removal

The Sabine Pass LNG project should be executed in two phases.

The first phase would include two trains with liquefaction capacity of approximately 1 Bcf/d.  Further expansion would be considered based upon customer interest.

Cheniere estimates that construction of the liquefaction capacity is comparable to expansion economics, since the Sabine Pass terminal already has many of the facilities required for an export terminal.

The existing infrastructure at the Sabine Pass terminal will be reconfigured as a bi-directional system:

 – Five storage tanks

 – Two berths

 – 94-mile Creole Trail Pipeline

Cheniere is working on setting up the financing for the $10 billion capital expenditure and got the formal approval from the Federal Energy Regulatory on April 17th.

This Sabine Pass LNG Terminal project should now move forward since Cheniere has signed long term contracts with BG in UK, Korea Gas in South Korea, Gas Natural Fenosa in Spain, GAIL in India, representing 90% of the capacity of the 4 LNG Trains.

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