South Korean LNG and power company SK E&S has reportedly received the country’s first U.S. spot cargo of LNG produced from shale gas.
SK E&S, a unit of SK Group, imported 66,000 tonnes of LNG from Cheniere’s Sabine Pass liquefaction plant in Lousiana, Reuters reported on Friday citing two industry sources.
The spot purchase aside, SK E&S is scheduled to import U.S. LNG under a long-term deal from 2019 through 2039. In 2013, the company agreed to buy 2.2 million tons per annum (mtpa) from the Freeport terminal currently being built on Quintana Island in Texas.
The Sabine Pass facility is currently the only such facility to ship U.S. shale gas overseas. Cheniere started exports from Sabine Pass in February last year.
The first U.S. shale gas delivery comes as the Korean government encourages domestic companies to look for more opportunities in U.S. oil and gas projects under the incoming administration of President-elect Donald Trump, the report notes.
South Korea is the world’s second largest importer of LNG and imports the chilled fuel mainly via state-owned Kogas.
Since, February, the majority of Sabine Pass cargoes landed in Latin America. However, in December this trend changed with the majority of the U.S. cargoes leaving for Asia where cold winter temperatures increased demand and rising spot LNG prices led to larger price spreads between the Atlantic and Pacific basins, providing greater incentive for exports from the U.S., EIA said in its latest report .
LNG World News Staff