Bill Knittle, Chief Supply Chain Officer, came to speak to our students this week at NC State. Bill is helping Cheniere build up one of the largest LNG exporting facilities in the world. Up until a week ago, Cheniere was also the ONLY LNG producer in the US.
Building an LNG exporting facility is complicated. LNG is loaded onto ships through massive facilities called “trains”, and converts gas taken from all over the United States and “liquifies” it into a form where it can be put onto a ship. A single ship containing LNG that leaves from its ports at Sabine Pass, Texas, and Corpus Christi, TX.
Cheniere’s competitive advantage is offering attractive options for global LNG buyers:
- New source of LNG supply for the global market
- LNG pricing tied to U.S. natural gas index
- It is a full-service company, offering flexible contract structure, including destination flexibility, ability to cancel cargo lifting with advance notice and FOB purchases of LNG (Cheniere purchases the natural gas feedstock and the customer purchases LNG at the tailgate)
- State-of-the-art technology – LNG trains are designed using the ConocoPhillips Optimized Cascade® process
Cheniere recently completed construction of the first 2 LNG trains to have been built in over 40 years in North America at its Sabine Pass LNG terminal in Cameron Parish, Louisiana. These projects were constructed on-time, on-budget, and Cheniere is operating their units at 15-17% more productively than anywhere in the world. Most competitors are in build mode, and Cheniere is now 50% of the US capacity supporting the world.
What also distinguishes the company is that they are also full-service, selling contracts up to the transportation point, tanker leasing, and full service to the point. Cheniere will also buy the gas on behalf of customers, and will soon become the largest buyer of natural gas in the US. Cheniere has constructed the full end to end supply chain for transportation of LNG around the world. They are projected to be the fourth largest LNG company in the world in the next few years, and the US will be the third largest LNG supplier by 2020 in the world.
We were honored to host Bill Knittle at this event, and pleased to hear his statement that “one of the reasons we are at NC State is that you have one of the truly elite supply chain programs in the country. The work that we are working on together on contract management is having a real impact on our supplier relationships and our supply chain, and we are pleased with the results we are seeing from the student teams this semester.”