By BEN LEFEBVRE
Cheniere Energy reiterated Friday it will be ready to begin
producing liquefied natural gas at its terminal in Sabine Pass,
La., in late 2015, a step that will lead to the first exports
of natural gas extracted in the contiguous US.
The announcement underscores how Cheniere, the only company
to possess the necessary government permits to export natural
gas to countries not in free-trade agreements with the US, is
on schedule with its first two processing units while
government regulators pore over about two dozen permit
applications from competing projects.
Cheniere said construction was about 20% complete
on the first two Sabine Pass LNG processing units, known as
Estimated completion dates for the two trains are running
according to Cheniere's advanced schedule, with the first
expected to begin LNG production in late 2015, the company
Cheniere in October 2011 signed a 20-year contract to sell 4.2
million tpy of LNG from Train 1 to a subsidiary of BG
Cheniere was among a handful of companies that built LNG
import terminals in the last decade, as the US was expected to
become a major natural gas importer due to declining
production. But hydraulic fracturing helped energy producers
unlock natural gas from shale formations, leading to an
unexpected supply glut that has crashed prices and opened up
the possibility of exports.
Cheniere moved before others to turn its idle Sabine Pass LNG
import terminal, sitting in a deep water shipping channel less
than four miles from the Gulf of Mexico, into an export
Overall, Cheniere has signed contracts to sell 16 million
tpy from four process units at Sabine Pass to customers
including Gas Natural Fenosa, Korea Gas Corp. and GAIL (India).
Cheniere has also agreed to sell 2 million tpy to Total at a
proposed fifth processing unit at Sabine Pass.
US natural gas prices have fallen 76% since June 2008,
making them among the lowest in the world and attractive to
buyers in Asia and Europe.
ExxonMobil, Freeport LNG and other would-be LNG exporters are
still waiting for government approval to ship natural gas to
countries not in a free-trade agreement with the US, a group
that includes lucrative markets such as Japan.
But as the company makes headway in constructing its
terminal, rising costs caused Cheniere and its Cheniere Energy
Partners unit to post wider fourth-quarter losses Friday.
Cheniere Energy reported a loss of $94.3 million, compared with
a loss of $57.8 million a year earlier. Revenue dropped 7.1% to
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