The shale fracking revolution in the US oil and gas industry has achieved a milestone: the first export of liquefied natural gas from the country outside of Alaska.
The tanker Asia Vision was loaded with a cargo of LNG by Texas firm Cheniere Energy at the Sabine Pass terminal in Louisiana late Wednesday and immediately left for Brazil.
“This historic event opens a new chapter for the country in energy trade and is a significant milestone for Cheniere,” said chairman and interim chief executive Neal Shear in a statement.
In 2008 Cheniere was still banking on the opposite strategy of gas imports. But the gush of gas from shale fields, enabled by developments in hydraulic fracturing or fracking technology, turned the tables.
US natural gas production shot up nearly 43 percent between 2010 and 2014 on the surge in shale output.
Output hit an all-time peak of 728.55 billion cubic meters in 2014 and will surpass that record in 2015, based on the data from the first 11 months of the year.
That has made Cheniere the first company to export LNG from the so-called “lower 48” states of the continental US. Exports have flowed from Alaska to Japan for several years.
“The interesting backstory is that Cheniere... actually started as a gas importation company,” said Stewart Glickman, an analyst at S&P Global Market Intelligence.
“Once they realized that we have more natural gas than we know what to do with, they pivoted 180 degrees,” Glickman said.
They are not the only ones. A number of other LNG export operations are being planned, including Texas-based Freeport LNG and Lake Charles LNG in southwest Louisiana, a project of Energy Transfer and BG Group.
Energy company Dominion has begun construction in Maryland of its Cove Point liquefaction facility for LNG exports to Japan and India.
Cheniere has already announced a dozen international commercial agreements. France’s Engie, for example, has a deal with Cheniere to buy up to 12 cargoes of LNG a year between 2018 and 2023.
According to Glickman, the cost differential between US and European natural gas explains the rush toward US gas exports projects.