September 20, 2022

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LNG Supply Line to Deliver 1.7 Bcf/d to US Corpus Christi Expansion

The Corpus Christi Stage 3 liquefaction project, which was sanctioned in June, will source Permian gas for the 10 million tons per year (1.4 billion cubic feet per day) expansion via a 43-mile supply line connected to Whistler Pipeline at Agua Dulce.

Cheniere Energy and Austin-based WhiteWater Midstream agreed this week to proceed with the ADCC Pipeline project with an initial capacity of 1.7 Bcf/d expandable to 2.5 Bcf/d by adding additional compression. While the supply line will deliver more gas than the Stage 3 buildout would require, Cheniere is already working on plans to continue adding trains and has proposed a stage four project at the terminal.

Cheniere, already the largest LNG exporter in the US, said in September it is considering large scale brownfield development at its Sabine Pass and Corpus Christie LNG export terminals that would raise its export capacity from 45 million tons/yr to 90 million tons/yr, or more than 12.3 Bcf/d. The Corpus Christi Stage 3 expansion alone will bring Cheniere's capacity up to 55 million tons by around 2025.

On the September conference call, Cheniere also raised full-year 2022 earnings guidance to $11 billion-$11.5 billion, based on an increase in cargoes moving from its Gulf Coast export terminals as well as sustained higher margins on open cargoes through 2022.

"Cheniere is truly firing all cylinders," Cheniere President and CEO Jack Fusco said at the time.

JV No Surprise

The Whistler Pipeline is a 450-mile, 2 Bcf/d capacity gasline supplied by the Waha Header near Coyanosa, Texas, and an 80-mile lateral into the Midland Basin. It is undergoing a 0.5 Bcf/d compression expansion that will come on line in September 2023.

It is not surprising that Cheniere and Whitewater would partner on the new supply line. When the Whistler project was rolled out in 2019, WhiteWater CEO Christer Rundlof cited Corpus Christi LNG and Mexico as prime markets for Whistler supply.

Tom Haywood, Houston

Czech Utility CEZ Receives First LNG Cargo To Eemshaven

Czech state-run utility CEZ has received its first LNG cargo on Sep. 20 into the recently inaugurated Dutch Eemshaven terminal, the Czech Industry Minister Jozef Sikela announced.

The cargo was delivered by the 174,000 cubic meter Gaslog Georgetown from the Sabine Pass plant on the US Gulf Coast and was purchased from US exporter Cheniere.

It was not confirmed whether this cargo was delivered through a long- or short-term contract; nonetheless CEZ is set to receive cargoes regularly into the Dutch terminal in the coming months, which suggests the utility has term supply deals in place.

“Two more tankers with gas intended for the Czech Republic will arrive during October, and we will continue at the rate of two to three ships per month," said Daniel Benes, CEO of CEZ.

Alternative Supply

The start up of the Eemshaven terminal is allowing Czech Republic to limit its exposure of Russian gas supplies on which, like most Central European countries, it has been highly dependent.

CEZ has booked 3 billion cubic meters per year of regasification capacity at Eemshaven, equaling one third of Czech annual demand, according to the trade ministry’s statement.

The statement also said the Czech utility also secured “the route for transporting gas to the Czech Republic,” although it may also use volume swaps between the different market areas to save on tariff costs.

Incoming Cargoes

There are at least two more cargoes that are expected to unload at the Dutch terminal by the end of this month, according to ship-tracking data by energy analytics firm Kpler.

The 170,000 cubic meters Methane Becki Anne, laden with a cargo from the US' Elba Island plant, is already waiting outside the Eemshaven terminal and is expected to discharge on Sep. 25.

Meanwhile, the 174,000 cubic meters Pearl LNG, which has lifted a cargo from Sabine Pass on Sep. 15, is set to arrive in the Dutch terminal on Sep. 30.

Both of these cargoes are being delivered to the Netherlands by Shell, which is another capacity holder at Eemshaven.

Daniel Stemler, Madrid


In Brief

Driftwood LNG Teeters as Tellurian Pulls Financing Scheme

The Driftwood LNG export project on the US Gulf Coast was pushed further into doubt this week when project developer Tellurian withdrew a $1 billion high-yield bond sale that was designed to kickstart financing for the venture.

The Houston-based company cited uncertainty in the junk-bond market for the move on Monday as the Federal Reserve seems poised to continue raising rates.

However, Tellurian has struggled to attract financing for its liquefied gas complex in Lake Charles, Louisiana, which it began constructing prior to obtaining funding.

Tellurian had offered very enticing terms for the bond including a 12.5% all-in yield and collateral that included shale-gas fields in the integrated project.

Tellurian Co-Founder and Chairman Charif Souki has been attempting to launch the LNG project for about six years. Last week, activist investor Achur Iskounen urged Tellurian's management and its directors to sell the “untenable” project.

Tom Haywood, Houston

Pakistan Revises Terms of LNG Purchase Tender

Pakistan LNG Ltd. (PLL) has extended the bid deadline and revised the terms of its LNG tender which was issued in August. The state-owned importer is seeking Brent-linked LNG supplies over six years starting January 2023 for one cargo each month on a delivered basis, or 72 cargoes in total.

The deadline for bid submission has been extended from Sept. 14 to Oct. 3, with bid validity until Oct. 20. This would shorten the bid validity period from 23 days to 18 days.

The shorter validity period is likely triggered by big price swings in the spot market which has discouraged sellers from participating in tenders with long bid validity periods.

PLL has also revised the delivery times by switching to a two-year delivery period from January 2023 to December 2024 and a four-year delivery period from January 2025 to December 2028, instead of the original one-year and five-year deliveries. Sellers are expected to submit separate bids for both delivery periods.

PLL said it is mandatory for bidders to submit oil-slope price proposals for both delivery periods, and it will not award cargoes for only 2023-24. It expects to award the tender on Oct. 20.

Prices of LNG to be delivered in 2023-24 are expected to command a higher price than that for 2025-28 as new LNG production is expected to come on line after 2025.

High spot LNG prices above $40 per million Btu have forced Pakistan to shun spot procurement and seek term supplies instead. PLL’s last four consecutive tenders for spot cargoes for July-September delivery have received a cold shoulder from suppliers and had to be scrapped, which widened its supply shortages and forced Prime Minister Shehbaz Sharif to take emergency measures to curtail gas use.
Clara Tan, Singapore


Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India36.5637.0536.5637.0536.0835.9137.6335.4137.5236.6235.7135.3735.80
Sodegaura, Japan36.9938.6538.6738.7936.9032.6538.1835.5338.0239.2236.0234.9437.14
Zeebrugge, Belgium35.2033.2232.7233.3334.5835.0034.1532.7233.9932.7634.7233.5734.83
Huelva, Spain38.1236.1735.6736.2837.4737.2037.0735.5636.9235.7037.5336.2837.54
Isle of Grain, UK28.2826.3725.9026.4727.7228.0827.4025.8927.1225.9327.8226.7227.92
Everett, US5.784.034.424.125.445.260.014.974.713.626.01----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback18. Apr2. May16. May30. May13. Jun27. Jun11. Jul25. Jul8. Aug22. Aug5. Sep19. Sep10203040506070Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia42.0040.00-1.82-2.00
SW Europe37.7538.8017.181.05
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)-0.047.727.758.28
NBP, UK (futures)+3.7736.0632.2941.77
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF4.0952.3048.2156.83
Zeebrugge (Belgium)1.5031.6030.1048.05
German NCG0.6849.6348.9558.21
NBP (UK)0.4629.1628.7044.60
US Markets
US Spot Prices
Sabine Pass, Louisiana0.127.947.828.38
Corpus Christi, Texas0.057.427.377.87
Cove Point, Maryland-0.126.927.047.74
Elba Island, Georgia----7.327.79
Nymex Henry Hub Futures
Near Month-0.047.727.758.28
Second Mth-0.037.777.808.33
Third Mth-0.037.937.978.48
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaOct '21Nov '21Dec '21Jan '22Feb '22Mar '22Apr '22May '22Jun '22Jul '22Aug '22Sep '220255075100125Energy Intelligence