US Sabine Pass Enters Commercial Phase

US Cheniere Energy Partners and engineers Bechtel declared that the 4.5mn metric tons/year Train 1 of Sabine Pass LNG export project was "substantially completed" May 27. Commissioning has been completed and Bechtel is turning over care, custody, and control of Train 1 to Cheniere Partners, they said May 31.

Although the plant did not start commissioning until the end of February, rather than in the fourth quarter of 2015 as announced, the handover of the plant was "months ahead of the guaranteed completion date and on budget," said Jack Fusco, CEO of Cheniere Partners. "I would like to thank Cheniere's professionals who have worked tirelessly since 2012 to complete this significant milestone. I would also like to congratulate our EPC partner Bechtel for this achievement and look to achieve many more."

Sabine Pass terminal (Credit: Cheniere)

Under a sale and purchase agreement (SPA) with BG Gulf Coast LNG, now owned by the Anglo-Dutch major Shell, the date of first commercial delivery (DFCD) for Train 1 is expected to occur in November 2016, upon which the SPA's 20-year term starts.

Prior to DFCD, Shell has certain rights to early cargoes produced from Train 1 as described in the SPA. In the next few months, the second train is expected to start loading commissioning cargoes. Trains three and four will follow later on this year or early next. Spot prices for LNG are much lower than when the building work began on these projects and mean a very narrow margin for the seller.

William Powell