Sabine Pass exported five LNG cargoes in July

OREANDA-NEWS. September 21, 2016. The Sabine Pass LNG terminal in Louisiana exported five cargoes in July with a combined volume equivalent to 15.7 Bcf (445mn m) of gas, the Department of Energy reported.

Sabine Pass started exporting LNG in late February, becoming the first major LNG export terminal operating in the contiguous US since the shale gas boom. Sabine Pass exported a gas equivalent of 63.5 Bcf through July, compared with total US January-July imports of 53.1 Bcf.

All the cargoes likely were sold to Shell under a so-called pre-commercial contractual arrangement, based on the reported prices, even though Sabine Pass Liquefaction was listed as the supplier and exporter of all the cargoes.

Shell has a 20-year contract to buy up to 3.5mn t/yr, equivalent to about 483mn cf/d of gas, of Sabine Pass supplies beginning in November, when the first liquefaction train at the facility starts long-term service. But since early May Shell has been able to buy essentially the same volumes under the same terms under pre-commercial arrangements, as long as Sabine Pass owner Cheniere Energy offers Shell cargoes at least 60 days in advance of the loading window.

Shell must pay Cheniere a liquefaction fee of \\$2.25/mmBtu plus 115pc of the final settlement price of the Nymex Henry Hub contract for a month in which a cargo is scheduled.

Four cargoes left Sabine Pass on 14-29 July, each at a free-on-board (FOB) price of \\$5.60/mmBtu, which corresponded to 115pc of the final Nymex July settlement of \\$2.917/mmBtu plus \\$2.25/mmBtu. Two of those cargoes were delivered to Chile, one to China and the other to Jordan.

Another cargo departed Sabine Pass on 1 July at an FOB price of \\$4.51/mmBtu, which corresponded to 115pc of the final Nymex June settlement of \\$1.963/mmBtu plus \\$2.25/mmBtu. That shipment went to Spain.

The volume-weighted average price for the five July exports was \\$5.40/mmBtu.

Meanwhile, American LNG Marketing in July exported four shipments in ISO containers, totaling a gas equivalent of 8.18mn cf, from Miami to Barbados. The FOB price for all the deliveries was \\$10/mmBtu. The LNG was produced by American LNG Marketing at its small liquefaction facility in Hialeah, Florida.

The US imported two cargoes in July with a combined volume equivalent to 5.7 Bcf, down by 20pc from July 2015. Both cargoes arrived at the Everett terminal outside Boston, Massachusetts, which is typically the nation's busies LNG import facility because of gas pipeline constraints in New England.

The imports had a volume-weighted average delivered price of \\$3.00/mmBtu and both came from Trinidad and Tobago under long-term contracts, which the US defines as being at least two years in duration.