Increasing LNG market provides expansion opportunity to Cheniere Energy
Liquefied natural gas, or LNG, has created tremendous new opportunities for companies in the chemical industry, and in early 2011 Cheniere Energy began exploring the possibility of exporting LNG from the U.S. to international markets. With the advancements in natural gas extraction and the development of the nearby Haynesville Shale, Cheniere leadership saw the opportunity to expand and convert its LNG import terminal in Cameron Parish into a bidirectional facility capable of both exporting LNG and receiving LNG for regasification.
Successful execution of such a plan required an extensive permitting process, as well as a highly skilled pool of talent from which to hire to manage the massive operation. This new capacity for exporting LNG would provide added value to a terminal that supported 77 jobs. LED and Cameron Parish embraced the opportunity to support this local company and facilitate a new and innovative capacity for the site. LED officials were as energized about this innovative new capability as the Cheniere executives.
LED goes to Washington to pave way for Cheniere expansion
With the market for LNG showing signs of strength, the company was in a position to not only expand, but to gain a competitive edge in the LNG industry. To secure this edge, the company needed to move quickly, but the process to gain the necessary permits was poised to slow the company’s momentum.
LED officials were eager to expedite and secure their permits quickly, and LED's Business Expansion and Retention Group, or BERG, and LED's Federal Programs group agreed that Cheniere could not miss this opportunity. Cheniere officials worked closely with these groups and the Louisiana congressional delegation to urge swift action in the permitting process.
With the effort to expedite the permitting process underway, LED offered a competitive incentive package to the company, which included the state's Industrial Tax Exemption and Quality Jobs programs. Cheniere's potential new exporting capabilities would result in the need for a highly-skilled workforce, and the company needed assistance in recruiting and training the best available talent. As part of the incentive package, LED FastStart® — rated the No. 1 workforce recruitment and training program in the nation — agreed to help by providing assistance to Bechtel, a Cheniere contractor for recruiting construction workers.
Expedited permitting moves terminal plans forward
With the support of LED and the congressional delegation in place, Cheniere was ready to embark on this new venture and capitalize on the new opportunity in the market. The efforts to expedite the permitting process proved successful, and Cheniere received authorization from the U.S. Department of Energy in May 2011 to become the first domestic terminal to export LNG. Additionally, Cheniere became the first company to receive both Department of Energy and Federal Energy Regulatory Commission permits. The company proceeded with its plans to liquefy and export the gas from the company's Sabine Pass Terminal in Cameron Parish through its subsidiary Sabine Pass Liquefaction LLC.
In July, with the permitting process complete and the investment funds in place, Cheniere announced its plans for an export terminal located at its existing LNG import facility at Sabine Pass, which would consist of four liquefaction trains. The company's approximately $12 billion investment, incorporating existing capacities and expansion activities at its Cameron Parish facilities, ranks as one of the largest industrial projects in Louisiana history.
Construction on the Cheniere facility’s new capacities began in 2012, and hiring for the 148 newly announced jobs began soon after. The company also retained 77 jobs at the facility.
LED FastStart – rated the No. 1 workforce recruitment and training program in the nation – provided assistance for recruiting a talented, qualified staff to support Cheniere’s new investment. FastStart also offered the services of a technical writer who will be remotely assigned to work with Cheniere and their contractor Bechtel in compiling training plans and documents for their project managers.
Cheniere highlights expanded project as progress continues
The collaboration of LED and state officials allowed for a swift permitting process, buying time for Cheniere to gain a competitive advantage in the growing natural gas export market. Under the Department of Energy permit, Sabine Liquefaction is allowed to export up to 803 billion cubic feet per year of domestically produced natural gas (or 16 million metric tons of LNG). The company has secured non-binding deals for 9.8 million metric tons of processing capacity annually and is converting those deals into definitive agreements.
As the first domestic export LNG terminal to export natural gas, Cheniere has already signed multiple 20-year contracts for the purchase and use of exported LNG from major foreign utility companies around the world.
While construction continued at the site, Cheniere expanded the scope of the export project from four liquefaction trains to six. The company’s announcement of the two additional trains brought the total project investment to more than $18 billion – further establishing the overall project as one of the largest industrial projects in Louisiana history.
Cheniere also increased the projected workforce count at the site, committing to create a total of 400 new direct jobs. Additionally, of the six total liquefaction trains, nearly all the LNG production capacity for the first five trains has been sold under 20-year contracts with major global clients. Cheniere anticipates construction of the additional two LNG trains to be completed in 2019.
“The Sabine Pass liquefaction facility is the first LNG export facility to be developed in over 40 years in North America,” said Cheniere Energy CEO Charif Souki (2002-2015). “Our facility is strategically located along the Gulf of Mexico in Cameron Parish. Louisiana has one of the most liquid natural gas markets, with an abundant supply of natural gas and a vast network of pipeline infrastructure. We are grateful to the State of Louisiana and its elected leaders, including Governor Jindal and his Cabinet, for welcoming us in their state and for their facilitation in the development of our Sabine Pass LNG export facility.”