July 8, 2015 [OPIS] - Cheniere Energy, a liquefied natural gas player, is planning to enter the U.S. oil market for the first time, industry sources told OPIS on Monday.
Cheniere is planning to build a crude pipeline and terminal in Texas, with a target in-service date set for the first quarter of 2017.
The 2 million-bbl-capacity crude terminal will be located at Corpus Christi, and it will receive West Texas crude from the Permian Basin. It is noted that the Gulf Coast is currently receiving West Texas crude via a few pipelines, including Permian Express 1 and 2, and Cactus.
Cheniere is expected to receive construction permits for the terminal, marine dock and pipeline by the end of this summer.
The Corpus Christi terminal location was chosen for its marine accessibility and slower tanker traffic flow compared with the relatively more congested Houston and Nederland ports.
The new terminal could be used to deliver West Texas crude to Louisiana and the U.S. East Coast via barges or tankers as well as exports to Canada. It will also look to export processed condensate to markets outside of the U.S.
The U.S. crude production is expected to continue to grow especially if prices firm up. U.S. crude exports remain banned, but exports of processed condensate are slated to increase significantly.
Cheniere is a Houston-based energy company primarily engaged in LNG-related businesses. It owns and operates the Sabine Pass LNG receiving terminal and Creole Trail Pipeline located in Louisiana.
Cheniere is developing up to nine liquefaction trains with aggregate design production capacity of 40.5 mtpa of LNG, or approximately 5.5 Bcf/d under two projects. The Sabine Pass liquefaction project is being developed for up to six liquefaction trains with aggregate design capacity of approximately 27 metric tons per annum (mtpa), through Cheniere Energy Partners.
Construction has begun on LNG Trains 1-4 at Sabine Pass with first LNG expected late 2015. The Corpus Christi liquefaction project is being developed for up to three liquefaction trains with expected aggregate nominal production capacity of 13.5 mtpa.
The Corpus Christi project will also include up to three LNG storage tanks and two marine berths. Construction has begun on LNG Trains 1-2 at Corpus Christi with first LNG expected in 2018.
Cheniere is expanding its LNG marketing and trading operations. Cheniere Marketing is offering LNG on an FOB or DES basis to customers interested in purchasing LNG in the short, mid-term markets. Cheniere Marketing has three vessel time charters for delivering LNG cargoes.
