The U.S. is about to export shale gas for the first time, with a shipment setting sail for Brazil.
Petroleo Brasileiro SA, Brazil’s state-owned energy giant, is scheduled to receive the first cargo of U.S. liquefied natural gas (LNG), Bloomberg reported. The Brazilian company reached an agreement Monday with Cheniere Energy Inc., a Houston energy company, according to a Bloomberg source who asked not to be identified because the information isn’t yet public.
Cheniere Energy began loading the first tanker of LNG at its hulking Sabine Pass terminal in Louisiana. The $18 billion plant, which rises from the coastal marsh like a futuristic city, began production Dec. 30. Cheniere Energy now receives about 50 million cubic feet of shale gas per day, chilling the fuel into a clear, colorless liquid stored in refrigerated tankers.
“The biggest buyer of LNG outside of the winter is Brazil first and Argentina second in the Atlantic Basin," Ted Michael, an analyst for energy data provider Genscape Inc., told Bloomberg. “They buy LNG for gas-powered, air-conditioned power."
Cheniere shares (NYSEMKT:LNG) rose 10 percent Wednesday to $33.57, the same day the Standard & Poor's 500 rose 0.4 percent.
The Sabine Pass facility is one of seven LNG export terminals to win U.S. regulatory approval in recent years, along with three more plants in Louisiana, two in Texas, and one in Maryland.
As hydraulic fracturing (fracking) helped unleash record supplies of U.S. natural gas, industry proponents pushed regulators to expedite the shipment of LNG abroad — a move they said would help to squeeze even more profits from the U.S. drilling boom. Environmental groups and community activists have staunchly opposed the projects, which they argued would accelerate fracking and natural gas consumption, in turn raising the risk of air and water pollution and boosting greenhouse gas emissions.
The LNG shipment to Brazil would arrive just weeks after the first export of U.S. crude oil in four decades arrived in Europe. An oil tanker carrying the cargo reached a French port in January, marking the first delivery of American oil since President Barack Obama in December signed a bill lifting a 40-year-old oil export ban.