Cheniere Energy's Port of Corpus Christi LNG Plant Will Cost $12 Billion

November 13, 2013 R.T. Dukes

Cheniere's Corpus Christi Liquefaction Project

Cheniere Energy is closer to making a decision on final investment in its Corpus Christi Liquefaction project.

Cheniere received a turnkey construction commitment priced at $800/tonne of liquefaction. The engineering and construction company Bechtel submitted the contract in September.

Cheniere has plans for up to six trains with 4.5 mtpa capacity each in Corpus Christi, but initial plans call for three trains with capacity of 13.5 mtpa (~1.8 Bcf/d).

At $800/tonne, the construction costs will be $800 x 13,500,000 tonnes = $10.8 billion. Add financing costs and the price tag will easily reach $12 billion.

Read:Port of Corpus Christi Booms on the Back of Eagle Ford Growth

Construction contracts are negotiated early in the process, but a final investment decision will be made by year-end 2014. The decision will come after commercial export contracts are agreed, all regulatory approvals are received, and financing is in order.

Read the company's full third quarter press release at cheniere.com

Cheniere Energy is based in Houston and is further along in buildinga LNG export terminal at Sabine Pass.

Bechtel is a worldwide engineering, construction, and project management firm based in San Francisco. The company has participated in the development of LNG projects in Australia, Equatorial Guinea, Russia, and Trinidad.

Energy Transfer Will Convert an Eagle Ford Gas Pipeline to Liquids to Supply Trafigura Terminal in Corpus Christi

November 12, 2013 R.T. Dukes

Trafigura Terminals Eagle Ford Port in Corpus Christi

Energy Transfer has reached an agreement with Trafigura for liquids capacity that supports the development of a pipeline supplying the Port of Corpus Christi.

Energy Transfer will utilize existing infrastructure to construct an 82-mile, 100,000 b/d pipeline system from McMullen County to the Port of Corpus Christi.

Leveraging underutilized natural gas pipelines allows Energy Transfer to have the pipeline running in 9-12 months.

“This pipeline combined with our deep-water terminal enables Trafigura to offer a complete solution to producers who seek to take Eagle Ford to the broader market.”

— Jeff Kopp, Trafigura's Director of Oil for North America.

Oil Tanker Leaving Port of Corpus Christi

The pipeline will deliver crude to Trafigura's Port of Corpus Christi Terminal, where a $500 million construction project is underway on a second deep-water dock that is 850 ft long and has a draft of 45 ft. Once complete, the terminal will be able to handle Aframax vessels (245 meters or ~800 ft long). Aframax ships are medium-sized oil tankers with capacity of approximately 750,000 barrels.

Trafigura states the facility will be able to handle three medium range tankers and two inland barges at one time.

Port of Corpus Christi Booms on the Back of Eagle Ford Growth

November 1, 2013 R.T. Dukes

We spent part of the week at the Fall Eagle Ford Consortium Conference and were able to attend a tour of the Port of Corpus Christi. In the past, oil was arriving on a regular basis, but Eagle Ford exports to other parts of the U.S. are outpacing imports for the first time. The Port is booming.

More than $3.8 billion in projects are under construction and another $10.7 billion are in some phase of permitting at the Port. The largest project being considered is a $10 billion natural gas liquefaction plant that has been proposed by Cheniere Energy.

“We would get excited about $10 million projects in the past and now we have $10 billion projects proposed”

— John LaRue of the Port of Corpus

The Cheniere site was formerly a proposed regasification site, but the need to import gas has been minimized by the abundance of shale gas in the U.S. If construction of the export terminal goes forward, as much as 2 bcf/d could be exported from the site.

While the LNG export facility is the biggest project, construction has yet to start and all of the activity seen around the area is related to other projects. A few of the largest projects include:

Nueces River Rail Yard - $46 million
M&G PET Resin Plant - Resin used in plastic packaging - $900 million
Trafigura Crude Oil Terminal - $500 million
Tianjin Pipe Corp - Seamless Pipe Plant - $1.3 billion
Oxy's Ingleside Energy Center - LPG Export - $1 billion

Other Takeaways from the Eagle Ford Consortium Conference

Federal funding is needed to help deepen the port to 52 ft
Math problem means funding hasn't caught up to Eagle Ford roads and some will be converted to gravel until oil and gas development subsides
Harbor Bridge in Corpus Christi will have a $800 million price tag
CNG is becoming more popular with transit authorities
One company using LNG in its oilfield service trucks expects a pay out in less than two years

Watch for more information in the coming months related to the Annual Eagle Ford Consortium Conference that is held in San Antonio in the spring of each year.

Port of Corpus Christi's Eagle Ford Oil Exports Exceed Oil Imports

September 24, 2013 R.T. Dukes

The Port of Corpus Christi has reached a milestone that won't likely be reversed any time soon. Oil exports from the port are exceeding imports. During the month of August, the port saw oil exports rise to almost 3.9 million barrels (~124,000 b/d) compared to inbound cargo of just 2.8 million barrels (~90,000 b/d). One year prior in August of 2012, the port was exporting just 2.8 million barrels (~90,000 b/d) and importing over 3 million barrels (~100,000 b/d).

“There’s new wells being drilled everyday. Mainly, right now, they’re oil,” John LaRue, Port Director, said. “The gas part has not, it initially took off but because the price of natural gas is so low, they’re not drilling as many of those.”

Port of Corpus Christi Has Barges Waiting To Move Eagle Ford Oil

June 26, 2013 R.T. Dukes

The Port of Corpus Christi has gone from moving less than 10,000 b/d of crude oil in 2011 to approximately 200,000 b/d in August 2012 to almost 350,000 b/d now.

Ships are now standing in line to move Eagle Ford crude and port expansions simply won't come fast enough.

“The longest [wait] I’ve seen is about seven days,” Ray Harrison, the port’s assistant harbor master said last Friday.

There are several construction projects underway or in the works

A new dock that can handle two 30,000 barrel barges will be in service this month
A new public dock has been approved that can handle four 30,000 barrel barges
Two other private projects on port land are being designed to load ships with 500,000 barrel capacity
Trafigura Terminals is expanding and will be able to handle three medium-range tankers and two inland barges at the same time

As noted by RBN Energy, approximately 30% of the oil shipped out of the port is headed for Morgan City, almost 30% is headed for Houston, another ~10% Beaumont, and ~10% to Texas City. The rest is sent to various locations throughout Texas and Louisiana.

There have been several stories on the port in the past few days. You can read more at platts.com,rbnenergy.com, and at learn more about Trafigura's terminal at texdockrail.com