Cheniere Repeats $1.5B “Note” Strategy with Second LNG Subsidiary
Cheniere Energy operates the only liquefied natural gas (LNG) export facility in the United States (currently), in Sabine Pass, Louisiana. There are others planned, like the Cove Point, Maryland facility currently under construction. We keep tabs on Cheniere, even though it’s located in Louisiana, because some of the pipelines that serve it have Marcellus/Utica natural gas flowing through them. It’s potentially a very important market for our natural gas. It’s not cheap to build and operate these massive petrochemical plants. In September Cheniere floated IOUs (i.e. bonds) to raise $1.5 billion for the Sabine Pass operation (see Cheniere Energy Upsizes IOU Offering from $1B to $1.5B). What you may not know is that Cheniere is also in the midst of building a second LNG export facility–in Corpus Christi, TX. Although we don’t know for sure, we expect that facility will, one day, also use at least some Marcellus/Utica gas to chill and export abroad. Cheniere must have had good success with raising $1.5 billion for Sabine Pass because they’ve turned around and are now doing it all over again–raising $1.5 billion by floating new notes–for the Corpus Christi project…
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Seems like GE Oil & Gas is putting its fingers in every U.S. o&g pie it can. In October GE announced it would pursue Baker Hughes for a merger/buyout (see 
The import/export picture for natural gas into and out of the U.S. has, in recent decades, been mostly imports and not exports. With the rapid scale-up in shale drilling, the supply picture here at home radically changed. For years we’ve exported natgas to Canada and Mexico, but we’ve also imported a lot of gas from Canada (via pipeline). In the end, we’ve always imported natgas on balance–both by pipeline and by LNG carrier ships. But that all changed with the construction and operation of Cheniere Energy’s Sabine Pass LNG export facility in southern Louisiana. Platts is reporting that for the first time in 60 years the U.S. will export more natural gas than it imports during the month of November. It happened for a few days in September, but in November the balance of trade has finally tipped and we are once again a net exporter of natural gas. How cool is that?! A big part of the reason why is the Marcellus/Utica…
Each month the U.S. Dept. of Energy’s Office of Fossil Energy issues a report on LNG exports and imports. We check in on the report from time to time. This month’s report (with data through September) is particularly interesting. It shows the rapid scale-up of Cheniere’s Sabine Pass export facility on the coast of Louisiana. Sabine Pass is exporting U.S. shale gas, including some Marcellus/Utica gas, which is why we are interested in the LNG story. November is predicted to set a new record on the export of U.S. shale gas from Sabine. The LNG import picture, increasingly small, is also interesting and instructive. All of the LNG coming into the U.S. (via ship, not via pipeline from Canada) this year has come from one country: Trinidad. And there is a single import terminal that receives almost all incoming, non-pipeline LNG: Everett, MA (near Boston). Which is why GDF Suez, the operator, has been agitating against new pipelines to New England (shame on them)…
The Sierra Club, which may have been founded for good reasons, long ago left the realm of sanity. Sierra Clubbers, as we call them, now live in an alternative universe where clean-burning natural gas and all fossil fuels are from the devil himself. The Clubbers have tried to get multiple LNG (liquefied natural gas) export facilities blocked on the theory that if you cut off the demand you can cut off the supply (i.e. end fracking of new wells). Yeah, crazy. But that’s what they’re trying. Lately they’ve tried to attack and bully both the Dept. of Energy and the Federal Energy Regulatory Commission. With legions of lawyers, they file frivolous lawsuit after frivolous lawsuit, hoping if they throw enough legal (ahem) feces against the wall, some it will stick. So far it hasn’t. One of the facilities the Sierra Club continues to fight against is Cove Point LNG in Maryland. They filed an appeal of a Dept. of Energy approval to allow Cove Point to export LNG to non-free trade agreement countries–namely Japan and India. Yep, the Sierra Club doesn’t want us to help out Japan or India. They’d rather have us help Saudi Arabia and Qatar, apparently. After the appeal went nowhere, the Clubbers have no sued in the uber-liberal D.C. Circuit Court of Appeals. Thing is, that very same court recently handed the Sierra Club a defeat in a similar case…
We spotted what is, to us, a fascinating story about propane use across the country. There are those, like LP Gas magazine, that closely watch usage trends for propane. As you may know, propane is an NGL, or natural gas liquid. It is one of the hydrocarbons that comes out of a borehole drilled to extract either oil or natural gas. Along with oil and gas other hydrocarbons come out of the hole–NGLs like propane, ethane, butane, etc. One of the places propane is increasingly produced, and consumed, is in the northeast–because of Marcellus/Utica drilling. The sharp editors at LP Gas noticed an historically unusual trend–a spike way up in propane usage in one of the main regions tracked, in the northeast. The explanation for the spike up in usage? Propane is getting exported from the Marcus Hook refinery. Therefore much larger volumes of propane are being “consumed” by those exports. Which we find fascinating. We are producing AND consuming propane within the Marcellus/Utica region. That is, we’re generating wealth by exporting propane. We knew about ethane exports already happening at Marcus Hook (see 
As we pointed out last week, the Canadian Goldboro LNG export plant continues to see activity, with an expected commitment coming in the next couple of months (see 
We’ve kept an eye on several LNG export projects along the Eastern shore of Canada (most of them in Nova Scotia) for some time. Why? Because they’re a huge potential market for Marcellus and Utica Shale gas. One of those projects, in Nova Scotia, is the Goldboro LNG project from Pieridae Energy. In February, the U.S. Dept. of Energy approved the plant for exporting to non-free trade agreement counties, back in February (see 
You may recall that evil corporate raider Carl Ichan fired the CEO of Cheniere Energy, Charif Souki, in December 2015 (see 
Sometimes the boneheaded decisions of others can benefit us. Take, for example, Scotland–where the government has placed a moratorium on fracking until…until the cows come home? Or is it sheep? The Swiss-based company INEOS is a young but rapidly growing chemical company with roughly $40 billion in sales per year. INEOS’ competitors would be companies like BASF, Bayer and Dow Chemical. INEOS has its fingers in a lot of pies. One of those pies is an ethane cracker plant in Grangemouth, Scotland. Because Scotland has not, and apparently will not, frack its own abundant, clean supply of natural gas (which would produce associated amounts of ethane), INEOS is forced to look elsewhere for large supplies of ethane–or shut the plant down. Rather than shut it down, INEOS has contracted with Marcellus/Utica drillers who send their ethane to the Marcus Hook refinery near Philadelphia where it then gets loaded onto ships the length of two football fields–to carry the ethane to places like Grangemouth. The first such shipment of Marcellus/Utica ethane heading to Grangemouth is set to arrive over the next few days. And Scotland’s tragic loss is our great gain, because INEOS has signed contracts to keep our ethane flowing to Grangemouth for the next 15 years…
For the gazillionth time, PennEast Pipeline is addressing the lie spread by opponents that “most a that thar gas will get exported overseas.” Virulent anti-drillers try to whip up opposition to the pipeline any way they can, including spreading the lie that PennEast gas will not stay local and benefit local residents. The single counter-argument that utterly destroys that lie is this: In order to export gas, PennEast would first have to apply for and receive permission from the U.S. Dept. of Energy. Guess what? PennEast has not (nor is going to) apply to the DOE for export permission, as they indicate in the following Letter to the Editor…
Cheniere Energy operates the only liquefied natural gas (LNG) export facility in the United States–currently. There are others planned, like the Cove Point, Maryland facility currently under construction. We keep tabs on Cheniere, even though it’s located in Louisiana, because the pipelines that serve it either are or soon will have Marcellus/Utica natural gas flowing through them–to the Cheniere plant. It’s potentially a very important market for our natural gas. We’ve had plenty of Cheniere news lately. Earlier this week we told you about a major restructuring at the top of the company, and the news that Train 2 at the plant is about ready to rock and roll (see