Second Sabine Pass train due in September

18 August 2016, Week 32 Issue 431

Cheniere Energy confirmed last week that its second train at Sabine Pass was in the process of commissioning, with the expectation of “substantial completion” in September of this year. The first train was completed in May. The third and fourth trains are expected to start in 2017, with project completion at around 87.4%, Cheniere said on August 9. The fifth train is 38.3% complete, ahead of schedule, and should be ready in 2019. Each train has nominal capacity of around 4.5 million tonnes. 

 

A sixth train is still being considered. Cheniere said it would take a final investment decision (FID) on this train after securing an EPC contract, in addition to commercial arrangements and adequate financing. 

Cheniere is also working on a three-train terminal at Corpus Christi. The first two trains are due to start up in 2019, while the third train remains a possibility. 

While Cheniere is making operational progress, it remains in the red. The company reported a net loss of US$298.4 million in the second quarter, from a net loss of US$118.5 million in the same period of 2015. Over the first six months of the year, the net loss was US$619.3 million, up from US$386.2 million in 2015. 

“The second quarter of 2016 saw Cheniere’s continued transition from a development company into an operating one. During the quarter we took over care, custody, and control of Train 1 of the Sabine Pass liquefaction project and commenced commercial sales of LNG,” Cheniere’s president and CEO, Jack Fusco, said. 

Five cargoes have been exported thus far under a contract with BG Gulf Coast, now part of Royal Dutch Shell, he continued. “On the financial front, we continued to manage our debt maturity profile by successfully issuing bonds to prepay a portion of the outstanding borrowings under credit facilities for both the Sabine Pass liquefaction project and the [Corpus Christi] project.”

Of 13 cargoes from Sabine Pass tracked by Genscape, nine have gone to Latin America, one to India, two to Europe and one to the Middle East. 

The company’s Corpus Christi unit issued US$1.25 billion of senior secured notes in May, at a rate of 7%, coming due in 2024. The bonds were used to prepay outstanding debt and other expenses. Meanwhile, in June, the Sabine Pass unit issued US$1.5 billion of senior secured notes in June, at 5.875%, due in 2026.