OREANDA-NEWS. March 21, 2017. Cheniere Energy today asked US regulators for authorization to start long-term operations of the third liquefaction train at its Sabine Pass LNG export terminal in Louisiana.

"Commissioning demonstration tests, which confirm the facilities can be operated safely and reliably, have been successfully completed for train 3," Houston-based Cheniere told the US Federal Energy Regulatory Commission (FERC). "Sabine Pass confirms that train 3 can be expected to operate safely as designed."

Cheniere is building five liquefaction trains at the $20bn Sabine Pass facility and two at its $10bn Corpus Christi LNG export project in Texas. Each train will have peak capacity of 5mn t/yr, equivalent to about 694mn cf/d (19.6mn m?/d) of gas, and baseload capacity of 4.5mn t/yr.

Cheniere said in a 28 February earnings call that it expects to take over operations of train 3 from contractor Bechtel late this month after it is placed into long-term regulated service. It said that if that happens, it likely would start a long-term contract in June with South Korean state-owned gas utility Korea Gas (Kogas).

Bechtel started testing train 3 in November and the unit has exported some LNG.

Sabine Pass train 1 exported its first cargo on 24 February 2016 and train 2 in August. Cheniere took control of train 1 on 27 May and train 2 in mid-September. Train 4 is expected to start exporting in the second half of 2016 and train 5 in 2019.

If the planned schedule for train 3 is achieved, Kogas likely would be required to start paying pro-rated liquefaction capacity fees of $547.5mn/yr on 1 June. Kogas would pay those fees for 20 years whether it takes LNG or not, which would give it strong incentive to take all its supply to try to defray its costs.

If Kogas procures LNG from Sabine Pass, it would pay Cheniere an additional 115pc of the final Nymex Henry Hub prompt-month settlement price for a month in which a cargo is scheduled. Kogas will pay $3/mmBtu for capacity of 3.5mn t/yr.