OREANDA-NEWS. Cheniere Energy could produce eight to 10 commissioning cargoes over the next two months from the first liquefaction train at Louisiana's Sabine Pass LNG facility, the companytold Argus today.

The company said the exact number depends on how quickly contractor Bechtel can complete the train. Cheniere expects Bechtel to complete commissioning in May and then turn the train's operations over to Cheniere.

Cheniere will have limited available spot cargoes through 2020 because it has sold much of the expected supply for that period, Cheniere senior vice president of business development and communications Katie Pipkin told Argus on the sidelines of the IHS CeraWeek conference in Houston this week.

The first commissioning cargo departed on 24 February for Brazil, on the Asia Vision vessel, which has capacity of 160,000m? of LNG, equivalent to about 3.3 Bcf of gas.

The commissioning cargoes could be sold on the spot market or as part of previous deals that Cheniere completed to sell LNG. They could be sold under previous deals if they are produced within the time frame for those contracts.

The most likely destinations for spot cargoes are Brazil and Europe, as Asian demand is depressed.

Each of Sabine Pass' five trains will have baseload capacity of 4.5mn t/yr, equivalent to about 620mn cf/d (17.5mn m?/d) of gas.

Cheniere financed the units by selling about 3.5mn t/yr of capacity from each train under 20-year, take-or-pay contracts to other parties. It reserved the remaining output for its Cheniere Marketing division, with the goal of earning more revenue by selling LNG to end-users, even though that entails more risk.

Production of about 1mn t/yr is equivalent to about 15 cargoes/yr, Pipkin said.

Cheniere expects to take over operations of train 2 in the fourth quarter, and trains 3-4 about six months after the respective previous train. The contractually guaranteed completion date for train 5 is December 2019.

The company has already sold 42 cargoes to various "investment-grade end users" in 2016-18, Pipkin said, declining to identify the companies. The cargoes will be sold at 115pc of the Nymex Henry Hub monthly settlement price for which a cargo is scheduled, plus liquefaction fees of at least $3/mmBtu. Some customers will buy cargoes under a free-on-board basis and provide shipping, while others will also pay Cheniere for delivery.

Cheniere has sold another 42 cargoes to France's EDF for delivery in 2016-18 and an additional 12 cargoes/yr to France's Engie in 2018-23, at prices linked to the UK's National Balancing Point or the Dutch TTF trading hubs, Pipkin said.

"We have sold a substantial portion of our supplies for 2016 and 2017 and a good portion in 2018-20," Pipkin said.

If the El Campesino power project in southern Chile makes a positive final investment decision (FID), Cheniere will provide about nine cargoes/yr, or about 600,000 t/yr, for 20 years to the planned Octopus LNG floating regasification terminal that would be installed near the site, Pipkin said.

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