US Cheniere eyes further 30mtpa expansion at both Sabine Pass, Corpus Christi

Ruth Liao

04-Aug-2022

HOUSTON (ICIS)–US Cheniere CEO Jack Fusco on 4 August said that as much as 30mpta in expansion volume across both Sabine Pass and Corpus Christi was in the early development stages, which would expand Cheniere’s existing and future production by a huge 58% beyond what has been financially sanctioned.

Fusco said during the company’s second-quarter earnings call that the regulatory process and a capital allocation plan would take place later this year.

“We’ve already sold incremental 3mtpa of volume beyond stage 3. Those contracts clearly demonstrate the demand in the market and we remain very focused on the next phase of growth,” Fusco said.

Cheniere made a final investment decision (FID) on Corpus Christi Stage 3 on 22 June, which would expand the south Texas project to 25mtpa. The existing Sabine Pass liquefaction complex has six trains with a total of 26mtpa.

The total expansion volumes, if realised, would balloon Cheniere’s production by 58%, effectively adding more than the equivalent of a new Sabine Pass, and rank Cheniere as a peer producer to the entire existing output of either Qatar, before its expansion, or Australia.

Fusco said that through de-bottlenecking and adding some midscale modular liquefaction trains at Corpus Christi, the nameplate capacity at the Texas plant could be raised to 30mtpa beyond Stage 3.

“We have a clear line of sight over to 30mtpa,” he said during the call.

This could mean that the remaining 25mtpa mentioned by Fusco could then be added as a brownfield expansion, nearly doubling Sabine Pass’ six large-scale trains in Cameron Parish, Louisiana, and likely utilising Cheniere’s preference for modular train development.


FID, CONTRACT ACTIVITY

The US producer has seen a brisk quarter with its FID for its Corpus Christi Stage 3 expansion and LNG offtake contracts for Corpus volume and expansion with South Korea’s POSCO, China’s PetroChina, Thailand’s PTT and US major Chevron.

The escalated prices and energy crisis in Europe from the war in Ukraine has driven the long-term interest for LNG contracts, supporting Cheniere’s future growth plans.

Cheniere reported $2.5bn in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the second quarter.

Cheniere said this quarter, 70% of its volumes went to Europe and volumes to Europe from the US from its plants were up 130% year-on-year.

“Margins in LNG remain significantly above historical norms,” Fusco said.

Cheniere’s executive Antol Feygin said during the call that Asian demand pulled back slightly as a result of China’s lockdown restrictions, although this was offset by nuclear maintenance in Japan and coal plant maintenance in South Korea.

Globally, buyers have secured 38mtpa in new long-term LNG contracts, which Cheniere noted has been the highest volume of term contracts signed since at least 2016.

Cheniere said that its first seven months of 2022 were the most productive in LNG contracting since 2011, amid Cheniere’s first phase of marketing Sabine Pass in the wake of the Fukushima earthquake and nuclear disaster in Japan.

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