Paradigm Shift In Oil & Gas Industry -- The Shale Revolution -- December 31, 2015

Bloomberg is reporting:

Cheniere Energy Inc. began production at what will become the first terminal to export natural gas from America’s shale formations.

The company is receiving about 50 million cubic feet of the fuel a day, chilling it into liquefied natural gas at the Sabine Pass terminal in Louisiana, and storing it in tanks before the first export.

Cheniere has previously said the inaugural cargo will leave the complex in January by tanker and that U.K.-based BG Group Plc is contracted to take the first shipment. Sabine Pass is “on schedule,” Ennis said. “You can’t dock a ship to offtake the LNG, until you have a full ship load of LNG in the tanks, which is planned to happen in January.”

The start at Sabine Pass paves the way for other planned liquefied natural gas terminals that are projected to turn the U.S. into one of the world’s largest suppliers. The country may be capable of exporting 7.76 billion cubic feet of gas a day by 2019.

While the U.S. has been sending gas abroad from Alaska for years, Cheniere’s cargo would mark the first to leave from the lower-48 states, a testament to surging shale supplies that have sent domestic stockpiles to record levels.

Cheniere’s export terminal underscores how dramatically the shale boom has reshaped the natural gas market. Before drillers started pulling the fuel out of tight-rock formations using hydraulic fracturing and horizontal drilling, Cheniere was building import terminals in anticipation of a domestic shortage.

Following the onslaught of shale gas, Cheniere started retrofitting terminals for exports.

The U.S. cargoes will mark “a paradigm shift for the industry,” Hadi Hallouche, head of liquefied natural gas trading at Trafigura Beheer BV, said by phone from Geneva.

The supply of natural gas scheduled to arrive at Cheniere’s Sabine Pass terminal from two pipelines for liquefaction has surged to 128,987 dekatherms as of Wednesday from just 6,720 a month ago. 

Much more at the link.

And there is more to come. This was posted back on October 4, 2015:

Which leads us to this article as reported in USA Today:

Now may not be the best time to unveil plans to export liquefied natural gas from the U.S. But don't tell Charles "Buddy" Roemer.

The former governor of Louisiana will formally announce Monday one of the largest LNG-export proposals in the U.S., at a time when faltering demand for gas in Asia, as well as low prices, threaten the viability of ventures much further along the way than his.

"There may be 40 ahead of us in the world already producing, but there are 30 behind us, and something is happening," said Roemer, chairman of a Baton Rouge-based G2 LNG. "This will be a powerful industry."

The company is assembling a project worth nearly $11 billion, which would make it one of the biggest energy undertakings ever in Louisiana. Over 30 years, G2 LNG would export 672 billion cubic feet of LNG annually to China, Europe, the Caribbean and India.

Note: in the October 4, 2015, the post suggested 672 billion cubic feet/year could be exported. In the article posted above today, the number has risen to almost 3,000 billion cubic feet / year by 2019 -- that's only three years from now, and by then we will have a new president.

Conversion:

• 1 billion cubic meters NG = 6.29 million barrels of oil equivalent
• 1,000 billion cubic feet/year = 6,290 million boe = 17 million boe/day 
• did I make a simple arithmetic error?