LNG & Ethane Exports Now in the Pipeline

Range Resources readies for east coast ethane shipments

From an Article of the Washington PA Observer-Reporter, January 19, 2016

Range Resources says it will begin shipping ethane to the east coast from the Marcellus Shale region next month.

The notice, according to a press release of Range, one of the biggest producers of natural gas in the Marcellus, is a result of a recent announcement by Sunoco Logistics that its Mariner East 1 pipeline will be fully operational in February.

Sunoco Logistics confirmed to Oil Price Information Service’s online publication TankTerminals.com that it began the commissioning sequence for ethane startup in December. Sunoco Logistics expected to begin the first ethane supply movements to Marcus Hook refining and shipping complex outside of Philadelphia from the Marcellus Shale region via the Mariner East 1 pipeline in January. Range said its first shipments of ethane from Marcellus production will begin in February.

“With the commencement of Mariner East 1, all three of Range’s major ethane and propane projects are operational, providing Range with a significant overall revenue uplift,” the Range release stated.

Range currently has three ethane projects in its portfolio, which use Mariner West, ATEX, and Mariner East 1. According to Range, more than 70 percent of its ethane is priced at indices other than Mont Belvieu in Texas, which it said provides a unique advantage.

At Range’s option, the remaining portion can be sold as ethane or left in the gas steam as a Btu uplift. The company said it is contracted to ship 20,000 barrels of ethane via pipeline to the Marcus Hook Industrial complex. Another 20,000 barrels of propane will be shipped via pipeline to Marcus Hook, where it can be sold in either the international market, or the local market, depending on which option yields the best price.

Range said it also has access to propane storage at Marcus Hook, which allows faster loading of ocean-going vessels.

Range said the three agreements give it the ability to sell ethane in Canada, Europe and at Mont Belvieu, as well as future petrochemical facilities in the Appalachian Basin.

See photo above and this Article:  Versatile tankers for Atlantic ethane

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Landmark U.S. LNG exports delayed to late February or March

From an Article by Scott DiSavino and Oleg Vukmanovic, Reuters News Service, January 14, 2016

The long-awaited first liquefied natural gas exports from the lower 48 U.S. states will have to wait another month or two due to mechanical problems at the Sabine Pass terminal in Louisiana, according to Cheniere Energy Partners LP. Cheniere said it expects to export the first cargo from the plant in late February or March. The company had expected that cargo to leave port in late January.

With expected growth in pipeline exports to Mexico and LNG exports to the world, the United States expects to transition from a net importer of gas to a net exporter by 2017 as the nation’s shale gas production continues to grow, according to federal energy forecasts.

Cheniere said construction of the 0.65 billion cubic feet per day first liquefaction train at Sabine Pass, Train 1, was completed well ahead of schedule and within budget. Instrumentation issues, however, were discovered during the final phases of plant commissioning and a cool down is required for some additional work over the next few weeks, the company said.

“We remain well ahead of the guaranteed contractual schedule with Bechtel and anticipate no issues in meeting all contractual targets and guaranteed completion dates,” said Neal Shear, interim president and chief executive at Cheniere.

Bechtel, the U.S. construction firm building the project, told Cheniere that full LNG production at Train 1 is planned for late February. The Energy Atlantic LNG tanker, which is scheduled to pick up the first cargo from Sabine Pass, has been sitting off the coast of the facility in the Gulf of Mexico.

Energy traders said the delay was not expected to result in much of a price reaction given the LNG oversupply already sloshing around the market.

Trains 2-5 are under construction at the plant. Analysts have said they would enter service between 2016 and 2019. Cheniere plans to build six 0.65 bcfd trains at Sabine Pass. When all trains are operating, the plant will be able to export up to 5 percent of the current U.S. gas production.

Houston-based Cheniere Energy Inc owns and operates Sabine Pass through its general partner ownership interest in Cheniere Energy Partners and partial ownership interest in Cheniere Energy Partners Holdings LLC.

Cheniere stock was trading at $32.23 at around midday on Thursday. That is well below its one-year high of $82.29 hit in March 2015.