Europe to receive second US LNG cargo?

Spain is expected to receive a cargo from Cheniere’s Sabine Pass LNG export terminal in Louisiana. This would be the second ever US LNG cargo produced from shale gas to reach Europe. The 138,000 cbm Sestao Knutsen LNG carrier is expected to arrive at Spain’s Mugardos LNG terminal located at the port

Spain is expected to receive a cargo from Cheniere’s Sabine Pass LNG export terminal in Louisiana. This would be the second ever US LNG cargo produced from shale gas to reach Europe.

The 138,000 cbm Sestao Knutsen LNG carrier is expected to arrive at Spain’s Mugardos LNG terminal located at the port of Ferrol around July 22, according to AIS data provided by the vessel tracking website, MarineTraffic.

Teekay’s MEGI-powered LNG carrier, Creole Spirit delivered the first cargo in April to Portugal’s Sines import terminal.

Houston-based Cheniere started exporting LNG from Sabine Pass Train 1 in February, a major milestone in global LNG trade as the US is set to become a net exporter of domestically sourced shale gas.

Since then, the company exported 16 cargoes of the chilled fuel from Sabine Pass, including the Sestao Knutsen cargo, according to the shipping data.

Cheniere is developing and constructing up to six liquefaction trains at Sabine Pass, with each train expected to have a nominal production capacity of about 4.5 mtpa of LNG.

The Houston-based company expects first cargo from the second train in late August, with substantial completion at the end of September, according to its latest monthly construction report.

U.S. LNG in Europe

Cheniere has signed long-term contracts with a number of European companies, including BG Group, now part of Hague-based LNG giant Shell, Gas Natural, Centrica, EDF etc.

Even tough there have been many discussions on the potential impact of US LNG on the European gas market, Cheniere’s LNG exports alone will not have a big impact, at least not for now, but as several more LNG export terminals are under construction along the Gulf Coast, things could change.

Cheniere’s Meg Gentle said earlier this year the facilities currently under construction in the United States will bring around 60 mtpa of LNG volumes by 2020, taking up about 20 percent of the market by that time.

In regards to the amount of US LNG that would end up in Europe, Gentle said that Europe is the “natural market for almost all US LNG exports”.

In 2015, Europe imported about 50 bcm of LNG while a report by Wood Mackenzie reveals that Europe could be importing about 130 bcm of LNG by 2020.

The 80 bcm increase could absorb almost the entire US LNG production capacity as it represents about 90 percent of US production expected in 2020, Gentle said.