Cheniere plans 4-week Sabine Pass shutdown

OREANDA-NEWS. August 10, 2016. Cheniere Energy will shut its Sabine Pass LNG export terminal for about four weeks sometime in September, the company said today.

Houston-based Cheniere previously said the Louisiana facility would be shut for an undetermined period in September or October. The maintenance is necessary to modify to gas flares that have not performed as expected, Cheniere said on an earnings call.

The first liquefaction train at Sabine Pass has been exporting about one cargo a week since it came on line in late February. Cheniere has said the second train is scheduled to export its first test cargo in the middle of this month and start long-term commercial operations in late September. It is unclear if the outage will delay the start of long-term operations at train 2 because the exact dates of the outage have not been determined, Cheniere told Argus after the earnings call.

Cheniere is building five liquefaction trains at the \\$20bn facility, each with peak capacity of 5mn t/yr, equivalent to about 694mn cf/d (19.6mn m?/d) of gas, and baseload capacity of 4.5mn t/yr.

Train 2 started producing LNG on 28 July, the company said today. Train 1 has exported 22 cargoes so far.

Cheniere has pushed back the substantial completion date for train 3 to June 2017 from April 2017 because of weather-related and other construction delays. The substantial completion date is when contractor Bechtel turns over a train to Cheniere for long-term contractual operations. Each train is expected to export four to 10 test cargoes before that date.

Cheniere is monitoring whether it will delay the August 2017 substantial completion date for train 4, the company said. Train 5 is scheduled to come on line in late 2019.

Cheniere also is building two trains of the same size in Corpus Christi, Texas. The first train is scheduled to be substantially complete in the first quarter of 2019 and the second in the second quarter of 2019.

Most of the volumes that will be produced this year will go to Shell, Cheniere said. Shell has 20-year contracts for up to 5.5mn t/yr of Sabine Pass supplies, with the first contract, for 3.5mn t/yr, starting in November. But Shell has had the right to take cargoes under the same terms since train 1 was substantially completed in May.

Cheniere earned \\$111mn from five cargoes it sold to Shell in the second quarter under long-term arrangements, the first time it has reported revenue from LNG sales. It sold six commissioning cargoes in the second quarter but did not report the profits because it had not yet taken control of the first train, it said. The company said today it received "market prices" for those sales, but did not elaborate.