Watching the U.S. become the fastest-growing global liquefied natural gas (LNG) exporter before our eyes is exciting stuff. On Thursday, Dominion Energy’s Cove Point LNG terminal became the second U.S. facility to export natural gas.
As global demand for natural gas continues to rise, we’re interested to see America’s four remaining LNG terminals join the party.
Dominion’s Cove Point Terminal Initiates First Export Mission
On March 1, Royal Dutch Shell’s 290m LNG tanker, Gemmata, departed Maryland’s Cove Point terminal loaded with shale gas in the facility’s first export mission. Dominion’s Cove Point LNG terminal is the second U.S. terminal to export LNG, following in the footsteps of Cheniere Energy Inc.’s Sabine Pass terminal, which exported its first cargo from Louisiana in early 2016.
Getting an LNG export facility up and running is no cheap endeavor. Dominion paid around $4 billion for its Cove Point facility, beginning construction in October 2014. The liquefaction facility is capable of liquefying around 0.75 billion cubic feet of gas per day (Bcf/d), operates 24/7 and holds a nameplate capacity of 5.25 metric tons per year (MTPA).
Shell Provides Natural Gas During Final Commissioning
Dominion’s Cove Point terminal is still undergoing final commissioning, during which, Royal Dutch Shell is providing the natural gas and its ship, Gemmata. Once commissioning is finished, Cove Point has 20-year deals to produce LNG for ST Cove Point (a joint venture between Tokyo Gas and Sumitomo Corporation) and New Delhi’s Gas India Limited (GAIL).
“All major equipment has been operated and is being commissioned as expected following a comprehensive round of testing and quality assurance activities,” Dominion said.
According to Reuters shipping data, the 286m LNG tanker, Methane Spirit, has left Singapore for Cove Point and is expected to arrive at the end of March.
U.S. Becoming Fastest Growing LNG Market
Starting in 2006, shale fields boosted U.S. natural gas production to levels that drastically decreased our need for Canadian pipeline and global LNG imports. Last year, the U.S. experienced a rapid shift from net importer to net exporter of natural gas - for the first time in 60 years.
Before Thursday’s Cove Point departure, Cheniere Energy Inc’s Sabine Pass terminal was the only LNG facility to export natural gas overseas. According to the Energy Information Administration (EIA) weekly natural gas report, Cheniere’s Sabine Pass facility shipped out 17.6 Bcf last week and 11.5 Bcf the week prior.
Demand for global LNG trade volumes have doubled since 2005, and America’s LNG export capacity has experienced global recognition overnight. U.S. LNG export capacity was just 0.9 Bcf/d in early 2016. We reached net export of 130 Bcf in 2017.
EIA projects natural gas consumption to increase through 2040. By 2019, as four more LNG export terminals enter the picture, EIA predicts that U.S. LNG export capacity could hit 9.7 Bcf/d. Today, U.S. LNG export capacity is around 3.7 Bcf/d.
Analysts project the U.S. will become the world’s third-leading LNG exporter by the end of 2018, falling just behind Australia and Qatar. Currently, Qatar, Australia, Malaysia, and Russia lead world natural gas sales, but U.S. suppliers easily make up the fastest-growing LNG market.