Louisiana terminal began production in May 2019
Two-train expansion and Texas, Mexico projects proposed
Some 15 months after production began at Sempra Energy’s Cameron LNG, the Louisiana export terminal has achieved full commercial operations for the three trains that constitute the first phase of the project, the operator said Aug. 10.
The power provider and midstream energy infrastructure company is determined to be one of the biggest exporters of LNG in North America, with proposals to expand Cameron LNG with two additional trains and build liquefaction facilities in Texas and on Mexico’s Pacific Coast. Ultimately, it hopes to, along with its partners, supply up to 45 million mt/year of LNG to Latin America, Asia, Europe and the Middle East.
Those ambitions have faced challenges due to relatively low international prices, weaker-than-expected demand in key end-user markets and trade flow disruptions fueled by the coronavirus pandemic.
A final investment decision for Port Arthur LNG has been delayed until 2021, while the timing of receiving a permit needed from the Mexican government for the Energia Costa Azul project is uncertain. The Cameron LNG expansion is dependent on Sempra securing sufficient commercial support. To date, it has not announced any firm long-term offtake contracts tied to the potential Trains 4 and 5.
In a statement about Train 3 commercial operations at Cameron LNG, Sempra acknowledged that “there can be no assurance” that the Phase 2 expansion and the company’s other two LNG export projects will be built.”
Feedgas deliveries to Cameron LNG, south of Lake Charles, Louisiana, rose to 1.45 Bcf/d on Aug. 10, a ramp-up from previous days that implies facility utilization was upwards of around 80% of nameplate capacity after accounting for on-site fuel consumption in the liquefaction turbines, S&P Global Platts Analytics data showed.
Due to netbacks that were weak all summer and the wave of cargo cancellations that have hit US liquefaction facilities, it is likely the ramp-up at Cameron LNG is primarily due to the start of commercial operations for Train 3, according to Platts Analytics.
The $10 billion Cameron LNG project — a joint venture of affiliates of majority owner San Diego-based Sempra, France’s Total, Japan’s Mitsui and a company jointly owned by Japan’s Mitsubishi and NYK — faced construction and weather-related delays in late 2017 and early 2018.
Production from Train 1 began on May 14, 2019, with the first commissioning cargo shipping a little over two weeks later. Cameron LNG achieved commercial operations for Train 1 and Train 2 in August 2019 and February 2020, respectively. To date, the facility has shipped nearly 100 cargoes, according to the operator.
Cameron LNG operates a tolling model under which the buyer of the LNG is solely responsible for shipping and securing its own feedgas. Besides the capacity that is being lifted by the portfolio players and end-users that make up the terminal’s ownership group, long-term offtake agreements have been secured with Japan’s Tokyo Gas and Toho Gas.
America’s promise as a leading global LNG supplier depends on the utilization of the six facilities now in operation and the two more that are currently under construction, as well as the success of a dozen other second wave projects that are actively being developed for service in the mid-2020s.