Still largely unscripted, America’s energy export story continues to unfold in promising new chapters. On the heels of an initial trade agreement, China will buy $52.4 billion more of U.S. energy over the next two years than the $8 billion purchased in 2017. And as that country continues to ramp up its transition from coal to natural gas, our nation’s LNG industry stands to gain the biggest slice of the pie.
Freeport LNG Development, L.P. was formed in 2002 to develop, own and operate an LNG terminal on Quintana Island, near Freeport, Texas. The terminal started LNG import operations in June 2008 and began LNG export operations in 2019. Freeport LNG is implementing the largest fully electric motor drive natural gas liquefaction plant in the world, reducing emissions at the facility by over 90% relative to other plants which use combustion turbines. Freeport LNG’s limited partnership interests are ultimately held by Michael Smith, Global Infrastructure Partners, and Osaka Gas Co., Ltd.
RMR today is following the latest news from Houston-based Freeport LNG, which just announced the start of commercial operations on the second liquefaction train at the company’s facility on Quintana Island near Freeport, Texas. Construction of the third train is near completion with an in-service date expected in May, and a now fourth train is under consideration following a $1.025 billion loan Freeport secured last September.
The LNG export landscape also is growing more competitive, even in its infancy. Freeport is quick to distinguish itself as the first world-scale electric LNG liquefaction plant in North America, using electric drive motors versus combustion turbines to power the liquefaction process. This, the company says, reduces emissions by more than 90% relative to other plants.
But back to the U.S.-China accord. CEOs from Cheniere, Tellurian and other LNG lions invited to the ceremonial signing view the first part of this trade agreement as a monumental opportunity despite the tariff devil in the details. LNG exports here are on the rise every month, keeping us well on a trajectory to become the world’s dominant player by 2024. Less than a month ago, a record 17 tanker ships with a combined capacity of 59 BCF of LNG departed U.S. terminals compared with 14 vessels ferrying 51 BCF the week before. Keep in mind we didn’t begin large-scale exports of gas until 2018. Since then, a whirlwind of new and proposed liquefaction facilities has added another unexpected chapter to our energy export story and no doubt America’s energy strength.
What do you think?