Jack Fusco, president and CEO of Cheniere Energy, Inc.
BEIJING, Apr. 1 (Xinhua) -- China is a large and fast-growing LNG market, and could soon be the largest in the world, said Jack Fusco, president and CEO of Cheniere Energy, Inc.
Fusco made the remark in an exclusive interview with Xinhua before the opening of the 19th International Conference & Exhibition on Liquefied Natural Gas (LNG2019). LNG2019 will be convened in Shanghai from April 2 to 5. Fusco is a speaker at the plenary forum “The Changing Map of LNG Supply” to be held on April 3.
Statistics from China’s General Administration of Customs show that in 2018, China imported 90.39 million tonnes of natural gas in total, up 31.9 percent year on year. China, for the first time, took the place of Japan and became the world’s largest natural gas importer. It is noteworthy that China’s LNG imports grew by 41.2 percent year on year to 53.78 million tonnes in 2018, yet still far lower than that of Japan, which was 82.93 million tonnes. With the improvement of infrastructures such as LNG receiving terminals, China’s LNG imports are expected to further expand.
“China is a key market for us. It has not bought much LNG from the U.S. among its current long-term contracted supplies. In fact, our deal with CNPC is the only direct sale between the two countries so far,” said Fusco.
On February 9, 2018, Cheniere Energy inked a long-term LNG supply contract with China National Petroleum Corporation (CNPC). The contract, which marks China’s first ever long-term deal to import U.S. LNG, requires Cheniere Energy to supply nearly 1.2 million tonnes of LNG to China every year. The deal is expected to continue through 2043.
“As the leading U.S. LNG exporter, we believe that there is an opportunity for Cheniere Energy to work with Chinese buyers to introduce additional volumes of competitive, flexible US LNG into the Chinese marketplace in future,” Fusco said.
In fact, Cheniere Energy has been proactive in expanding its own production capacity in recent years, which not only boosts the development of U.S. LNG industry, but also helps deliver more LNG to a wide range of overseas buyers.
According to Fusco, Cheniere just reached substantial completion on two separate trains in just over a week. “We reached substantial completion on Train 5 at our Sabine Pass liquefaction project in Louisiana on March 7 and on Train 1 at our Corpus Christi project in Texas on February 28.”
Currently, Cheniere’s two liquefaction projects have eight liquefaction trains, representing 36 million tonnes/annum (mtpa) of total production capacity, either in operation or under construction. “We expect to sanction Train 6 at Sabine Pass in the near future and after that we will focus on our Stage III expansion at Corpus Christi. Stage III will have a capacity of around 9.5 mtpa and when sanctioned will bring our total combined production capacity across our two projects to 50 mtpa,” said Fusco.
“But we do not expect to end there. We also have a Stage IV expansion planned at Corpus Christi which would add a further 20 mtpa,” he added.
According to Fusco, Cheniere by far has exported a total of 575 cargoes to 32 different countries and regions around the world. He believed that U.S. gas prices will stay around 3 US dollars/mmBtu or less, over the long-term, based on abundant, cheap-to-produce U.S. gas reserves. In addition the cost of building liquefaction capacity on the Gulf of Mexico in the U.S. is among the lowest in the world. These two factors, in combination, mean that the U.S. is likely to be cost competitive with most other major new projects currently proposed.
When talking about LNG 2019, Fusco said he is looking forward to catching up with industry colleagues, hearing about the latest commercial and technical trends in the presentation sessions.
This triennial event was first held in 1968. This year marks the first time the conference to be held in China, the world’s fastest growing LNG market. LNG 2019 is presented by the International Gas Union (IGU), Gas Technology Institute (GTI) and the International Institute of Refrigeration (IIR). The Shanghai conference, the largest LNG event ever held in China, is hosted by China LNG Association, China Gas Society, Chinese Association of Refrigeration and China Gas Association. An estimate of over 170 enterprises and 1,800 representatives from 53 countries and regions will attend the conference. (Contributed by Zhou Yuran)