Gas flow reversal complete: US exports 1st L48 LNG cargo

 

In a historic reversal of gas flows, Cheniere loaded and shipped the first LNG cargo to leave the US Lower 48 for export. Our US Upstream Week in Brief looks at the implications of this dramatic first and what it means for the global LNG market, along with other notable developments this week in the US upstream landscape.

This week, Cheniere's Asia Vision tanker left the Sabine Pass terminal with its first LNG cargo — a watershed moment for US gas markets. As the first LNG export from the US Lower 48, the departure marks the complete reversal of gas flows.

At its inception, Sabine Pass was built as an import terminal. Its transformation into the first US export terminal for LNG just three-and-a-half years after construction began on Train 1 testifies to the revolutionary nature of US shale plays. This initial LNG cargo is reported to be heading toward Brazil, though BG will own most of the capacity from the first train after the commissioning period ends.

With short-term global gas markets less robust than they were when Sabine Pass was under construction, our global LNG analysts predict some risk of shut-ins with the current small spread between Henry Hub and international gas prices. Our medium-term outlook, however, expects demand for US LNG to grow as global markets expand and costs remain low.

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You can purchase our full US Upstream Week In Brief on demand to read this week's top stories in the North America Upstream sector, including BHP's dividend cut and companywide re-org; a look into whether crude contango will drive more US exports; examining the implications of midstream operators facing tough negotiations; and what it means that US operators have run up US$5.7 billion in secondary offerings to date this year.

Our full Insight reports on the first exports from Sabine Pass and five things to watch for in global gas and LNG are also available for purchase on-demand.

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