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

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.

Freeport LNG Looking For Financing - Planning Gas Exports

Freeport TX LNG

Freeport LNG is looking to raise more than $7.5 billion to begin construction at its proposed LNG export facility in Freeport, TX.

The Energy Department has approved 1.4 Bcfd in exports at the site and the company is seeking approval for an additional 1.4 Bcfd. The facility still needs FERC approval and expects to know more in 2014. If everything goes as planned, one export train a year will come online starting in 2017.

The Freeport LNG facility has agreements to export gas for Osaka Gas, Chubu Electric Power, and BP.

Cheniere Energy is the only LNG export facility to receive full approval to export US natural gas. The Cheniere facility is located at Sabine Pass and construction started in August of 2012.

Production continues to grow in what are historically consuming areas like the Marcellus Shale. If production continues to grow in the Northeast, exports will be a welcomed market for Eagle Ford gas. Exports might even be needed to support any significant amount of natural gas development.

Eagle Ford Crude to Canada? - Valero Gets Approval

Valero Quebec City Refinery

Valero received US Department of Commerce approval to ship Eagle Ford crude oil to a refinery in Quebec City, Canada. A shipment has yet to set sail, but the company expects it could save $1-2 per barrel by utilizing Gulf Coast (Eagle Ford) volumes versus crude shipped across the Atlantic.

The Department of Commerce permit was approved in November and is good for 12 months. The permit restricts exports to Eastern Canada. Valero has not indicated when it will begin making shipments to the Quebec refinery from the Gulf Coast.

Read the full article at bloomberg.com

Eagle Ford Natural Gas is Headed for Mexico - Major Pipeline Expansions Planned

Gas Pipeline Arid

Eagle Ford natural gas pipeline expansions are headed for Mexico. An $8 billion expansion of Mexican natural gas infrastructure is being pushed forward. The early focus is on industrial cities in the northern half of the country where a $3 billion expansion is planned.

"Mexico has a unique opportunity, we have access to the world's cheapest gas," Mexican Energy Minister Jordy Herrera said of the U.S. supply in announcing the new pipeline plans earlier this year. "This is competitiveness for the industry of our country."

U.S. companies are lining up to help supply and construct the proposed Mexican infrastructure. Expect to see companies like Kinder Morgan reverse the direction of some of its current natural gas flows and expand pipelines into Mexico. The Eagle Ford currently produces almost 3 bcf/d, but that number could almost triple over the next five years. That's a lot of natural gas to be absorbed in South Texas. Actually, its much more than the region can absorb. If 5+ bcf/d of additional supply comes online, the natural gas will need a market. That market will either come from Mexico or from across the globe shipped as LNG. Both pipelines and liquefaction facilities come with big price tags, but don't expect PEMEX (Mexico's national oil company) to wait around. The country needs natural gas and the Eagle Ford is positioned well to answer.

Read the full story detailing Mexico's plans at chron.com

Exporting Eagle Ford Gas is One Step Closer

Cheniere Energy announced the week before Christmas that it has plans for a Texas natural gas export facility near Corpus Christi and that it reached a supply agreement with an Indian company for gas exported from the Sabine Pass export terminal in Louisiana. Through its Corpus Christi Liquefaction subsidiary, the company began the regulatory process for getting approval to add a 2 Bcf/d export facility in the La Quinta Channel on the Northeast side of Corpus Christi Bay in San Patricio County, TX. An export facility where operators can lock in higher gas prices for extended periods would expand commercial development of the Eagle Ford further into the dry gas window.

Cheniere Energy also added a supply agreement at its Sabine Pass facility. The company and GAIL Limited have agreed to a 20 year deal where the Indian company will purchase 3.5 mtpa or close to 500 mmcfd of gas at a price indexed to Henry Hub. The contract begins with the first commercial delivery.

GAIL signed an Eagle Ford JV agreement with Carrizo in September of 2011 and the deal with Cheniere is a big step in ensuring the company realizes better natural gas prices. 

The Eagle Ford is largely supported by liquids (condensate, oil, NGLs) production, but better gas prices could open up the dry gas window to higher levels of development.

(Development) at one of Cheniere's existing sites that was previously permitted for a regasification terminal. The LNG export terminal site is located in San Patricio County, Texas, and it is anticipated that the terminal would be primarily supplied by reserves from the Eagle Ford Shale, located approximately sixty miles northwest of Corpus Christi. The proposed liquefaction project ("Corpus Christi Project") is being designed for up to three trains capable of producing in aggregate up to 13.5 million tonnes per annum ("mtpa").

Read more at cheniere.com

"GAIL will join BG and Gas Natural Fenosa as the next foundation customer for our Sabine Pass liquefaction project. GAIL is India's leading natural gas company and its largest shareholder is the Government of India," said Charif Souki, Chairman and CEO. "We are building a strong portfolio of customers, consisting of energy companies engaged in the natural gas, LNG and power markets with operations spanning the globe. We continue to hold advanced discussions with additional global LNG buyers and expect to complete commercial discussions for the remaining capacity of the second phase of the project, train three, in the coming weeks."

Read the entire press release at cheniere.com