Elba Island

2019 was supposed to be a milestone year for U.S. LNG exports. And to a degree, it has been. Natural gas pipeline deliveries to liquefaction and export terminals have peaked above 6.5 Bcf/d in the past couple of weeks and averaged about 6 Bcf/d for that period, up nearly 2 Bcf/d from where they started this year and more than twice where they stood at this time a year ago. But the growth has come haltingly as under-construction projects have faced a number of setbacks and delays. Moreover, the longer-term, “second-wave” export projects still in the early stages of development and looking to pass “go” are facing challenges of their own, including global oversupply and collapsed margins. Today, we begin a short series providing an update on where U.S. LNG export demand and new projects stand.

After a period of delays, commissioning activity at the newest U.S. LNG export terminals is poised to accelerate in the coming months, in turn bringing on incremental feedgas demand. Sempra’s Cameron LNG has said it’s ready to introduce feedgas to its fuel system and is awaiting federal approval. Meanwhile, liquefaction projects at Kinder Morgan’s Elba Island LNG and Freeport LNG terminals are gearing up to take feedgas in the next month or so. Feedgas deliveries to the operating export facilities in the past seven days have averaged 5.5 Bcf/d. These three projects alone are slated to add another 1.2 Bcf/d of incremental feedgas demand by July, bringing the total to 6.7 Bcf/d by then, if all goes well. In today’s blog, we continue examining the status and timing of LNG export projects in 2019, this time with a closer look at the Cameron, Elba and Freeport projects.

One of the biggest factors affecting the U.S. natural gas market in 2019 will undoubtedly be the dramatic rise in LNG export demand. The slate of liquefaction and LNG export capacity additions this year will boost U.S. demand for feedgas supply to nearly 9 Bcf/d by the end of the year, almost tripling the 2018 full-year average of 3.1 Bcf/d and close to doubling the December 2018 average of 4.6 Bcf/d, with the lion’s share of that growth happening along the Texas and Louisiana Gulf Coast. Three liquefaction trains — one each at Cheniere Energy’s Sabine Pass and Corpus Christi terminals, as well as one at Cameron LNG — are likely to be fully operational in the first quarter, with five additional trains due in rapid progression later in 2019. That much new gas demand concentrated in one region is bound to disrupt physical flows and pricing dynamics. Today, we wrap up the series with a look at the timing and feedgas routes for the final two facilities: Freeport LNG in Texas and Kinder Morgan’s Elba Island project in Georgia.