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Bechtel’s Impact Report

Cheniere Energy Sabine Pass LNG Case Study

Since the discovery and exploration of shale gas in North America, there has been a significant increase in the U.S. natural gas production. The domestic energy industry is deploying fewer resources to produce more natural gas than ever before, highlighting the dramatic productivity gains that resulted from booming gas output from the country’s shale formations that turned the market around. 

The advances of the production of shale gas dramatically increased the amount of gas that could be recovered at a relatively low cost. With this, came an opportunity for the U.S. to export gas to other countries with a much higher natural gas market prices, and at a time when the demand for liquified natural gas (LNG) was expected to be growing faster than the demand for natural gas overall.

Cheniere Energy Partners LP grasped the opportunity rising from the dramatic increase in U.S. gas production and hydraulic fracturing with a regasification plant on the Gulf of Mexico. Over the course of four years (2005 – 2009), Bechtel built and expanded the Sabine Pass LNG receiving terminal. More recently, we’ve added the liquefication capability so that the terminals’ storage tanks, shipping berths, and pipelines could be used for LNG export.

Cheniere’s vision and ability to be a first mover in the U.S. shale gas to LNG export market has been instrumental in the huge success of Sabine Pass LNG. Knowing that the U.S. natural gas market had flipped quickly, and somewhat unexpectedly, Cheniere assumed that it could happen again. This led to the need for liquefaction facilities to be on line quickly in order to take advantage of the market opportunity.

As a result of the timely decision-making, Sabine Pass LNG because the first LNG export terminal to receive FERC approval and begin pre-filling in August 2010. The U.S. Department of Energy granted the order authorizing Sabine to export LNG in September 2010. By being a first mover in such a short time to market, Cheniere was able to generate significant interest from capital markets and LNG buyers.

This paper sheds light on the economics, technology/design features, execution facets, and operational flexibility of Sabine Pass LNG project, as well as provides some detailed on the startup and commissioning aspects of the first two trains. As of March 2019, five LNG trains are operational with a sixth train under development.

Click on the attachment below to read the full case study.


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