Cheniere reaffirms LNG export date CHENIERE Energy, the Houston-based company that is the frontrunner among potential North American LNG exporters, has reaffirmed its operating target date of late 2015 for the export terminal it is building at Sabine Pass on Louisianas Gulf coast. Reporting its first quarter results, Cheniere said in early May that the first two gas processing trains, each of 4.5 million tonnes per annum (mtpa) capacity, are on track for commissioning in 2015-16, with first gas from Train 1 in "late 2015." Cheniere plans to build up to six trains at Sabine Pass for a total capacity of 27 million tonnes. It has signed 20-year sales agreements with five big customers - BG Group, Gas Natural Fenosa of Spain, Korea Gas, GAIL India and Total Gas and Power, covering most of the output from the first four trains, but will also have about 2 mtpa left over for spot sales. In addition, it signed a 20-year agreement in March with UK-based energy utility Centrica covering deliveries from the fifth train. Cheniere is also proposing to build a separate LNG export terminal at Corpus Christi in Texas by 2017, and has received US government approval to export up to 15 mtpa from this facility. Cheniere's emergence as the first new North American LNG exporter will pit it squarely against Qatar and the wave of Australian production coming from the three LNG export plants now under construction at Gladstone on the Queensland coast, and expansions and additions to various North West Shelf gas projects. Along with potential new suppliers in Africa and Russia, this means Asia's big gas buyers - essentially Japan, South Korea, China, Taiwan and India - will have more choice and the chance of more competitive prices. In the wake of the 2011 tsunami and the shutdown of Japan's nuclear power industry, gas demand has soared in North Asia. Some energy utilities have had to pay spot rates as high as $20 per million metric British thermal units (mmbtu), though the average import price in Japan last month fell to about $14.50/mmbtu. Cheniere anticipates it can land gas in Asia for $10.60/mmbtu based on a Henry Hub price of $4. The cost of LNG is usually linked to a percentage of the world oil price, but the potential for North America to liquefy its abundant and cheap shale gas and ship it to Asia has raised the tantalising prospect of LNG linked to the much lower US Henry Hub gas prices. Before Sabine Pass or any of the Gladstone projects come onstream, the $19 billion ExxonMobil-Oil Search venture in Papua New Guinea is expected to begin first LNG exports from its 6.6 mtpa Port Moresby facility in 2014. All of its output is committed to buyers in China (Sinopec), Japan (Osaka Gas, Tokyo Electric Power Co) and Taiwan's Chinese Petroleum Corp. This time last year, the expectation was that the first new LNG exporter to enter the market in the 2012-14 period would be the Sonangol-Chevron 5.2 mmtpa Angola LNG plant at Soyo on the west coast of Africa, with first shipments planned for the second half of 2012. But a series of technical issues has pushed back its starting date, with Chevron now saying shipments will begin "in the second quarter of 2013." In Algeria, state-run oil and gas company Sonatrach aims to have its expanded LNG export plants at Skikda and Arzew ready in late 2013, mainly to supply Europe. At Skikda, Sonatrach is building a new 4.5 mtpa processing train to replace facilities destroyed in a 2004 explosion, while at Arzew it is adding a 4.7 mtpa train. Another Sonatrach gas project in Algeria, Gassi Touil, may begin shipments in the second half of 2014 - well behind schedule. Originally, it was to be completed in 2009 under a since-terminated joint venture with Spanish companies Repsol and Gas Natural Fenosa. Sonatrach also supplies gas to Europe via three pipelines linking Algeria to Spain and Italy. China, the world's biggest energy user, takes LNG from Australia and the Middle East, but also relies heavily on pipelines. This month, a new 770 km gas pipeline from Myanmar's Kyaukpyu port in the Bay of Bengal to Kunming in Yunnan province is expected to become operational, while in July, Turkmenistan will be able to supply more gas into the double-pipe 1830 km Central Asian Gas Pipeline (CAGP) that runs from Turkmenistan to China via Uzbekistan and Kazakhstan. Russia sends vast quantities of gas to Europe through an extensive pipeline network, and is keen to expand pipeline gas sales to China. Russian state-owned gas giant Gazprom also plans to build an LNG export terminal at Vladivostok by 2018, with Japanese customers in mind. In Southeast Asia, Malaysia and Indonesia both are likely to have new LNG capacity come on stream in 2014-15. For example, the 2.1 mtpa Donggi-Senoro plant in Central Sulawesi, is expected to ship first gas in October 2014. Japan's Mitsubishi Corp is the major shareholder with 44.9 per cent, in partnership with Indonesia's state-owned Pertamina (29 per cent), listed Indonesian oil and gas company Medco Energi (11.1 per cent), and Kogas (15 per cent). Malaysia's Petronas plans to build a ninth 3.6 mtpa train at its Bintulu, Sarawak LNG project, with completion earmarked for the end of 2015, as well as a floating LNG project offshore. In North America, more than a dozen US and Canadian LNG projects are planned, but not all of them are likely to eventuate in the face of political, environmental and financial constraints, with total North American LNG export volumes unlikely to surpass 40 mtpa by 2020. Apart from Cheniere's Sabine Pass project, Kitimat in Canada's British Columbia is a likely venue for LNG exports to Asia, with three groups led respectively by Shell, Petronas and Apache-Chevron looking to establish plants there. While Australia may become the world's biggest seaborne LNG exporter by 2018, for now that title remains with Qatar, with 77 mtpa of capacity, followed by Malaysia and Indonesia. The biggest customer for seaborne LNG is Japan, with annual imports of about 80 million tonnes, followed by South Korea and China. India is also growing in importance as a customer. By 2020, total Asian LNG demand is expected to reach 400 million tonnes a year. Geoff Hiscock writes on international business and is the author of "Earth Wars: The Battle for Global Resources," published by John Wiley & Sons