Based on shipments to date and likely output for Q4, the United States is set to export approximately 20M tonnes of LNG in 2018. Such a volume would propel the country past Indonesia into the No 5 slot in the LNG exporters league table and place it in contention with Nigeria for the No 4 position.
As a result of new liquefaction plants due to be commissioned in 2019, the US will move past Malaysia and become the world’s third largest LNG exporter next year, behind only Qatar and Australia.
LNG exports from the lower-48 US states commenced in February 2016 when the first train of Cheniere Energy’s bi-directional Sabine Pass LNG complex, with a capacity of 4.5M mta, was commissioned. Overseas shipments of US LNG in 2017 totalled 12.24M tonnes, all from the first four trains at Sabine Pass.
This year Sabine Pass has been joined by Dominion Energy’s single-train 5.5-mta Cove Point terminal in Maryland on the US East Coast, which dispatched its first cargo in March.
Three other US LNG export facilities could be active by the end of the year, including Sabine Pass Train 5, the first 4.5 mta train of Cheniere Energy’s new greenfield terminal at Corpus Christi, Texas and the first of 10 planned, small-scale, 0.25 mta liquefaction modules at Kinder Morgan’s Elba Island LNG terminal in Georgia.
The new production facilities which are not commissioned in 2018 are expected to become active early in the new year, adding 2-2.5 mta to US LNG export volumes in Q1 2019 before rising to full output levels later in the year.
Following these plant start-ups, the first of three 4.6-mta trains at the Cameron LNG terminal in Louisiana and the first of three 5.1-mta trains at the Freeport LNG terminal in Texas are scheduled to load their first export cargoes in Q2 2019.
By the end of 2020, when the 10 small-scale Elba Island trains and the 15 large-scale trains at Cove Point, Sabine Pass, Corpus Christi, Cameron and Freeport are all up and running, the US will have an aggregate LNG export capacity of 65 mta. While this US output will still be less than that from Australia and Qatar, it will be at least double that of its nearest rival for third place.
US project developers have no intention of resting on these laurels. Proposals for another 15 US LNG export schemes, virtually all in the US Gulf region, have been tabled. The most likely of this second wave of projects to come to fruition first are Golden Pass LNG, Driftwood LNG, Calcasieu Pass LNG, Magnolia LNG and Sabine Pass Train 6.
The five possible second-wave US Gulf projects hold the potential to produce another 50 mta of LNG, an additional volume that would push the US into the top spot among the world’s LNG export nations.
Developers of these five schemes will need to be assured of sales of a certain critical volume of their LNG output before making final investment decisions. China, the world’s strongest LNG import growth market, has loomed large in their targeted customer base.
The Chinese government’s decision to introduce a 10% tariff on US LNG imports from 24 September 2018, as part of the tit-for-tat US/China trade war now gathering pace, will not have done the chances of this second wave of US LNG export projects materialising any favours.
Although China is not the only potential market for new US LNG output, it is a critical one. And, while project developers will take some consolation that a 10% surcharge on their competitively priced US LNG is not particularly onerous, they will want to be confident that the trade war with China will not escalate further.
All aspects of the ship/shore interface will be discussed at the LNG Ship/Shore Interface Conference Europe, 22-23 November 2018 in London.