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2026.09.23 | TB | Energy | Cheniere Utilisation & Maintenance

原标题：Cheniere Energy – Running Hot – Utilisation, Maintenance & Cost Implications

#energy

Third Bridge · 2026-09-23

Analyst-led • 9 Sep 2026

Companies: VG US, LNG US

Les Hanson (LH) VP, Operations at Commonwealth LNG LLC

Curren Larson (CL) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

CL [00:00:01]: Welcome to Third Bridge's Interview entitled Cheniere Energy – Running Hot – Utilisation, Maintenance & Cost Implications. I'm Curren Larson, and I'll be facilitating today's Interview with Mr Les Hanson, VP of Operations at Commonwealth LNG.

Before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

LH [00:00:30]: I agree.

CL [00:00:31]: Would you mind briefly introducing yourself before we jump into the questions?

LH [00:00:37]: Les Hanson, Vice President of Operations, 38-plus years in operations and maintenance with 16 in petrochemicals, namely ethylene production and 20 years in LNG production. I joined the Cheniere Energy in 2005 and stayed with them until 2016, and then slipped out of Cheniere and joined the Venture Global LNG facility in 2017, stayed with them until '22, where I joined Commonwealth LNG in June '22, which is where I'm currently at.

Questions

[00:01:12] Could you outline Cheniere Energy's positioning in the broader LNG [liquefied natural gas] market today, focusing on the company's operational performance? Given the narrative that the company has a structurally advantaged operating cost position among LNG exporters, what specific aspects of Cheniere's facility design and operating model are driving that advantage? Which of those advantages do you think are particularly difficult for a newer facility to replicate today, as all this capacity comes online?

LH [00:02:09]: I think Cheniere's advantage really starts with their just a basic facility architecture. Sabine Pass LNG and the Corpus Christi facilities both use a number of… I'm going to put a smaller number of very large, somewhat mature liquefaction trains built around the ConocoPhillips Optimized Cascade [Process], COP process, we call it, which is about a 50-year-old technology. Really, that means fewer trains, fewer repeated equipment packages, fewer control interfaces. Everything is more diminished as opposed to a modular build. Also, too, there's a secondary structural advantage for Cheniere is really their redundancy built within their train design, their mega train infrastructure itself, that architecture. Then the third, I would probably say that the COP process that's been around is a very mature process, somewhere in the neighbourhood of about 50 years ago. Air Products is very instrumental in the design, which gives them a significant advantage. Bechtel built and commissioned all six of those trains, and we can get into some of those.

From my experience, the things that are hardest to replicate from some of the newer facilities out there that Cheniere has an advantage of is years of accumulated operating history and lessons learned or failure data, we call it. Also, a very mature, reliably centred maintenance programme, plus they took advantage of a very stable, highly experienced operations and maintenance workforce, which gives them an advantage compared to modular builds and a very long-established vendor relationship. Now it's been running cheap. I separate regas from liquefaction. Yes, they've got regas around the world, but really liquefaction brings a whole different level of process configuration and proven long-run operating campaigns that the regas doesn't have. I think we have to separate that out as some of the newer facilities don't really have that proven long-run operating data. Really, that's where I see Cheniere's… Some of their lower operating cost position in the industry.

CL [00:05:25]: You noted redundancy built into Cheniere's train design. Could you elaborate on that? Why would that be particularly difficult to replicate?

LH [00:05:37]: Their refrigeration cycles use a dual or a parallel compressor strings. In other words, there's two compressors for every train. You got two for ethylene, two for propane, two for LNG. Losing a major compressor doesn't necessarily mean losing the entire train. It's built into the train itself, whereas in comparison to, say, Venture Global, their N+1, they'd call it, is really to slightly raise production in the… If we're referring to CP1, which is Venture Global's model right now, there's not enough data from Plaquemines to really prove this out. However, for CP1, their claim to fame is basically the fact that they can raise production 5-6% across 17 trains and make up the difference in loss of production for the one train that they do have, whereas… One set of redundancy for VG would be if I took a train down to raise production on the rest. It's a plant-wide redundancy, whereas for Cheniere, it's built within the mega train itself. You see the difference there?

CL [00:05:37]: Yes. I see what you're saying.

[00:07:05] Across the advantages you laid out, what's driving the most measurable cost difference per MMBtu [one million British Thermal Units]?

LH [00:07:23]: I've looked at that very carefully over the years. I look at it globally as a… If you had 18 1975-model pickup trucks in your front yard and they're all running, you've got to maintain all of those spinny, shiny things. Even though if one of those trucks went down, yes, you've still got the rest that can carry the load for a period of time. The problem is you've got so many pieces of equipment. You've got 18, and then at Plaquemines, you've got 36. Then at CP2, you'll have another 36. You'll have nearly 100 trains running all at the same time. It's driving up your operating cost, whereas the redundancy that's built into the mega trains from Cheniere, your availability for equipment is a lot higher. Cheniere chose to go with a maintenance redundancy programme to where if… It's engineered and designed at a much higher level, meaning to keep this mega train from going down, I've got two 100% compressors, but if I lose one or if I have to maintain one, the train automatically is at 50% capacity.

What they did was they built in a 2x 100%-ers, which means if either one of those refridge cycles goes offline, I can simply ramp up the secondary that's running or I can… Whether it's a maintenance issue, whether it's unplanned outage, whatever the situation is, I've got built-in redundancy inside of the mega trains, which is a unique factor. I've got better availability. Because I've got 18, defrost becomes an issue. Instead of having a turnaround in the mega trains every 3.5-4.5 years to do hot section, what we call, hot section swap-outs where we take a portion of the gas turbine offline and replace it with another one. I've got about a four-year window to do all the maintenance and cram it in that 15-day period of time. At Venture Global, when we do that, you've only got about a three-month run time before you got to bring the unit back down again. Every time I bring it down, I've got a dump refrigerant, which is quite costly, that's USD 1.5m. You've got a shorter turnaround period of about 10-15 days.

Depending on what it's related to, generally, the train comes offline in a 5-10-day period of time. You're either going to get it back up in a 10-day window or a five-day window depending on the difficulty that you're dealing with. Being that you're all electric at Venture Global's facility, you have a lot quicker turnaround times, 5-10 days. However, if I have to do that every 90 days, it's not going to take long before my OPEX begins to climb for availability vs Cheniere's availability. That's why you're approaching that as there… It's publicly stated in their operating cost of bumping nearly USD 2 per MMBtu. I think that's definitely worth paying attention to.

CL [00:11:59]: I thought Cheniere had been USD 2 per MMBtu.

LH [00:12:01]: It's the other way around.. Now these numbers that I'm going by are numbers that was published in 2022, which may have been altered somewhat.. Now you're bumping USD 2 per MMBtu for VG.

[00:13:25] Do you think the narrative around Cheniere is overstated? Would you highlight any particular disadvantages, besides spot capacity amid elevated pricing?

LH [00:13:39]: I think what's more important now and where Venture Global gains the advantage is really speed to market. For Cheniere, from the time we made FID to the time we made rundown at train one was about 60 months, 59.5-60.5, somewhere in that two-month timeframe, so I average it out at about 60 months. For Venture Global, that was 25 months. They were able to go from FID… Now you're making less production, you're only making 0.625 million tonnes of production for one train at Venture Global, where you're making 4.5 million tonnes for that first train that comes online in 60 months. That's one significant difference between speed to market. Speed to market does matter. "Hey, I've got a series of banks out here that have put up USD 8bn, USD 10bn, USD 12bn for me to build this monstrous asset. The faster I can get to rundown schedule-wise, the more beneficial it is for the offtaker, the banks, everybody wins," and that's the bet that Venture Global is going after. Cheniere Energy played it a little bit differently. They wanted reliability to be a major focus here. They wanted a very stable operation, which Bechtel organisation or the Bechtel EPC company gave them, high reliability. That's one significant difference between why they choose to do it. Now if you'll notice, Cheniere now is looking at modularity for their new trains, 7-8 come online, and we can talk about the whys.

Again, the speed to market plays a significant role. Cheniere is already established from a customer base throughout the world, is a very stable, reliable provider of LNG, and that's a very huge determining factor when it comes to sales and purchase agreements that the offtakes look at. They want to look at your credibility and how stable are you, and can you keep your facilities running. If you're looking to sell gas to a major, for instance, Tokyo Gas, they want a very stable source. They don't want a design. They're not going to put their money behind an organisation that could potentially trip offline or lose production or anything else that could impact their production. I think that's a very big determining factor as to why it's so important to build the reliability into the design. Now that a lot of lessons learned have come out of the Venture Global model, a lot of EPCs have looked at that lessons learned and it's shared in the industry between all of the big players, the big EPC contractors, the big Fluors and Bechtels and KBR, they're looking at these lessons learned to say, "Okay, how can we take these concepts that Venture Global worked through and develop and build an operating facility that raises that reliability so that even though it's a modular build, we don't have nearly the operating cost that Venture Global has to deal with?"

That has been incorporated in the new design from Commonwealth, I can tell you, some of the things we learned from Venture [in terms] of what not to do, all the way down from the fab yards, how the trains are actually built, the quality control that goes into making sure quality and safety is built into the facility.

[00:18:02] Thinking about the different buckets going into OPEX, is there anything in today's environment that you think could lead to cost inflation or drive up OPEX per MMBtu?

LH [00:18:24]: Not that we didn't already know. I think Cheniere has achieved that reliability primarily from engineering a long-duration operating campaign. We already know all of this information right now. I don't really see any big surprising shockers. I think Venture Global was the pioneer to… John the Baptist on how cheap can we drive the CAPEX down. Now we've got a car that will get us there. We just don't have any power windows, power doors. There's no automation to this thing. Automation to the degree that the mega trains are automated. Venture Global still today cannot get the trains to work collectively through a master controller. I think that's a major disadvantage to that design. That is being addressed. It is being worked on. They are trying to come up with a mechanism to… It's like having 18 cars travelling down the road at the same time, all on the same cruise control. It's very difficult because you've got parts and pieces within the train itself that's making changes to that particular train built on the PLC that's driving that one train. To group them all together and have them run independently and automatic, yes, you can make them run independently one at a time, but you can't make them globally, the whole plant running automatic at one time. That's being addressed now. That's probably one of the biggest deterrents to modularity that I see that's a huge disadvantage to modularity.

[00:20:36] How meaningful are the Baker Hughes fleet-wide gas turbine upgrades at Sabine Pass in terms of sustaining operational performance over the long term? What specifically do these upgrades improve?

LH [00:21:01]: Gosh. There's a new design that they've been working on for a number of years that has to do with their seals and seal loss. There's a significant amount of waste that's generated through the seals every single year or really every day, and it's measured out per MMBtu per tonnes of production per year. It plays a part. Seal loss is a significant cost. They've come out with some new technology. I don't know when it's actually going to be embedded. I know that Baker Hughes is looking at how can we get a handle on all the seal loss. Now they've got some mechanical seals that actually at a given, above, what we call, criticals, which is an RPM-based criticality once the rotating equipment gets to 8,000-9,000 on RPMs, the mechanical seal actually spins back away through centrifugal force, still holding back pressure against the gas up against the seal.

Then on the downstream side, it prevents any gas leak across the seal. However, there's hardly no friction… I won't say there's no friction because it depends on where you are in that process of spinning up the machine, but they just about completely eliminated seal loss and new… Under this seal technology that's gone into their new machines. I fully can see a time in the next two or three, four years when these new turbines come online that seal loss will be a thing of the past. When you're talking USD 0.05 per MMBtu, that's a huge number to go up the flare. I think that's one advantage that they really had to offer.

CL [00:23:13]: Are you saying that seal loss costs can be USD 0.05-0.06 per MMBtu?

LH [00:23:19]: In some cases, absolutely.

[00:23:26] Given that the North America LNG space is running at a pretty high utilisation, Cheniere's management attributed the recent production uplift to improved reliability and debottlenecking, including reduced downtime. What are the physical limits to sustaining a train at 10-15% above its original design capacity? Is that something to be concerned about?

LH [00:23:58]: How could you sustain that? Is that the question?

CL [00:24:01]: Yes. Can you sustain it? What are the inherent risks of doing so?

LH [00:24:10]: You can certainly do that with the facilities at Sabine Pass. It's just a more forgiving process. You've got better turndown. At Venture Global, we didn't have that sort of flexibility. I think the chart boxes prove that out in flexibility. Let me pull up your e-mail real quick and take a look through here. Give me just a second. There's a number of systems within liquefaction… Strictly speaking about GE technology. I'm assuming you're talking about liquefaction rather than the GE turbine manufacturer turbomachinery. Is that correct?

CL [00:25:10]: Yes.

LH [00:25:13]: Okay. Yes, as a whole, you've got air coolers and condensers, your whole refrigeration balance, your cold boxes, pretreatment. When you bundle that all up and you're looking at just gas turbine refrigerant compressors, some of the early indication of bouncing up against that or you're approaching the true limit of that equipment whether it's driver load, the speed of the machines, compressor discharge temperatures, pressure ratios, all of these things that go into that refrigerant compressor stream for the turbine is pretty much known. You're not really going to expand on any of that. You're at the top quartile of your operating conditions around that equipment. If we look at air coolers and condensers, some of the top end of your rising condensing pressures, summertime derating that goes on, you pretty much know exactly where that is. From Cheniere's point of view, it's built better than the facilities that we had in the Sahara Desert. Even though humidity is an issue along the Gulf Coast, it's really not a problem to continue to make the production that you're making for the types of equipment that you have at the operating temperatures and humidity ranges, whether it's Corpus or Sabine Pass, they're both very efficient.

The first warning to me in my mind that Cheniere may have gone beyond their recoverable design margin, I wouldn't say, it's probably associated with equipment failure. It's really declining that operating margin, continuing to push it, that higher compressor load, smaller end of surge margins, increasing Delta P and less ability to absorb feed gas composition changes. As long as you continue to hover within the guidelines that GE gives you, you're bouncing between summertime, winter times, you run right up to the limit of that and you don't exceed that, you're probably going to be fine. Now they do run over design and somebody might ask, what, 110-115% overdesign runs, would that necessarily accelerate degradation? From what I've seen, no, it doesn't. Not if the increased production is coming primarily from recovering overdesign and removing bottlenecks, I would say no. A 5 million tonnes per annum nameplate may have been deliberately conservative relative to what the installed compressor and all the equipment exchangers could sustain, but once the operating experience demonstrates that additional margin, to me, I think the facility has well-established a higher normal operating envelope. No, I don't see 110-115% necessarily to have any impact on productivity.

Then you ask, when does that extra production stop being economically worthwhile? My answer would be there's really no universal answer like 112-115%. The economics are extremely favourable for small incremental LNG from both of those two facilities because most of the capital and fixed operating organisation already exists. If a 5 million tonne train would gain another 10%, which is roughly 0.5MTPA of incremental LNG, the revenue from that production would justify a meaningful increase in expenditure and maintenance expenditure. I would watch higher fuel maintenance consumption. This is something we generally do, and they have a whole entire operational excellence. Both organisations now have operational excellence programme that's looking at impact to higher throughput, higher fuel maintenance consumption, reduced operating margins, shorter maintenance intervals. They're getting better at maintaining the equipment. They're learning the lessons learned. Plus, they've got a lot of machine learning technology that's involved in their process now, more forced derated trips. They're learning the impact of these forced trips. Then just annual production begins to fall despite higher incidents or instantaneous rates. To me, that's the last stage of a real economic crossover when you begin to see higher throughput.

Things, you can also tell some of… What are your signals that you cross those thresholds, then you're going to start seeing shorter intervals between your planned and corrective maintenance programmes. Some of your rising condition monitoring findings and bad actor equipment, they'll start identifying themselves and the software that the AIMS programmes, and they both have AIMS now is looking at these thresholds that tell you where are we deteriorating in thermal efficiency and more fuel consumption per tonne of LNG. Then increased unplanned derates downtime. That's another significant thing to pay attention to that tells me, "Hey, I'm beginning to cross this threshold." You're going to run right up against it without crossing it, but you really have to know what these intervals are and then some of the rising condition monitoring findings, just pay attention to those.

CL [00:32:45]: Did you have more to add to that?

LH [00:00:19]: No. There's a whole world of engineering that goes with utilisation that really speaks to when are we… How do we know we're right up against the top end of that extra production that's being produced over that 110%, 112%, 115%. I pay attention to a lot of those factors as we operate the plant.

CL [00:33:18]: Are you saying that you might start seeing throughput degradation when you're approaching that line?

LH [00:33:23]: Yes. For the amount of effort that I'm putting into it, I'm really not producing any more. I'm spinning the machine faster. I'm pressing the equipment harder, but I'm not necessarily really gaining anything. Then increasing unplanned downtime is going to start making itself noticed.

[00:33:56] Regarding the shift in the properties of the feed gas today, does elevated nitrogen impact the ability to sustain peak utilisation? Does that impact the wear and tear of liquefaction?

LH [00:34:18]: Yes, absolutely. Number one, it doesn't give you any useful LNG heating value, and it requires cold-end processing capacity. From an operations point of view, when I see elevated nitrogen, it's generally in some combination of greater flash gas generation. You're going to get higher BOG handling requirements. Are you familiar with the term BOG?

CL [00:35:07]: I'm not in depth.

LH [00:35:09]: BOG is the boil-off that's being produced from the LNG that you're condensing. When my nitrogen elevation goes up, then you get a higher boil-off gas handling requirement. Now I've got to load my machine, my boil-off gas compressor at a higher rate. You're going to start seeing that. Absolutely, elevated nitrogen impacts peak production. Also, too, LNG, your heating value specification, you're going to start seeing that as a constraint. Lower useful methane throughput for the same compressor loading. You're okay at about a 90% plant utilisation. That's generally manageable, but at about 110-115%, nitrogen will definitely become more consequential because it's less unused refrigerant and hydraulic margin that's available to you. It's primarily a capacity and efficiency derater rather than a mechanical reliability problem.

CL [00:36:40]: Does it show up in OPEX as well? If so, what difference does that make?

LH [00:36:49]: Oh man, now you're down in the… Definitely in the molecules. I don't so much look at it as just a bottom-line number, higher cold-end refrigeration duty begins to make itself known. That's where I'm really looking at it operationally is on higher cold-end refridge duty, greater flash gas generation. The compressors are working way harder. How do you equate that from a monetary point of view? It's difficult to say that. Its impact becomes increasingly visible as the plant begins to approach peak refrigeration capacity.

[00:37:47] You mentioned that you don't see high utilisation being a significant risk on equipment degradation, but we've heard that cold boxes can't keep spares on-site and have extensive lead times of 3-4 years. Given that trains are now running above nameplate capacity, would you be concerned about the fatigue life of primary heat exchangers? What might be the implications for future maintenance?

LH [00:38:32]: Gosh, comparing VG with Cheniere high utilisation and high cycling are not the same thing. A Cheniere train that's operating steadily at 110% for a 3-4-year, it's generally, 48-month campaigns can potentially consume less cryogenic equipment failure life than a lower rate modular train repeatedly undergoing an outage, defrost or a cool down, especially a restart. I see the trains and the numbers prove this out that the trains at Cheniere just consumed less cryogenic equipment failure fatigue. Their sparing philosophy is set up based on that principle. That's why warehousing is set up the way it is. That's why there's such a mass sparing facilities set up for Venture Global because Cheniere did expect greater cryogenic equipment failure on a number of pieces of equipment that they have. I think that's something to think about from a reliability… That's what really proves it out to me. I kept asking at VG, why is our warehouse this big. For one thing, they generate 720MW of power. The liquefaction in the whole entire processing trains is all electric, where at Cheniere, it's all gas turbine driven.

On one hand, I've got gas turbines that are driving my liquefaction process, but I've got the superheated steam generators that generate 720MW of power. That's an enormous maintenance nightmare for VG. That's another piece of this that goes into their operating cost. Cost a lot of money to maintain equipment that runs 3,200lb of pressure to drive all these big steam turbines. Each one of those are 250MW. When they lose one steam turbine, it does an enormous amount of damage, not only to the power generation side, but now you got the ripple effect on the process side of equipment that's slowing down that you may have to take offline, warm it up. Then when the steam side recovers, then you can have enough power available to begin to cool down again. Depending on how long it was down, you either bought yourself 10 days or three weeks to slowly cool all of those depending on how many trains come offline, 10-15, 20 days' worth of downtime to recool the train down. I think that's a significant factor that plays into high utilisation and high cycling mentality when it comes to sparing this equipment.

[00:42:24] Cheniere has moved to a mid-scale train design at Corpus Christi Stage 3, with each train adding roughly 1.5MTPA [million tonnes per annum]. What are the key challenges in running these small modular trains compared to the larger trains at Sabine Pass?

LH [00:43:14]: For one thing, they're still learning these mid-scale single-mixed refrigerant modular, they're still learning that. Those processes and technology maturity is another major factor. I think any time you've got numerous smaller repeated compressor packages vs Cheniere's large… If you're just comparing mega vs train, that's an easy fix out there. It's not the same, "Yes, okay, I might have 10 trains producing what one mega train will produce but it doesn't run the same." Any time you've got a much larger population of individual valves, instruments, electrical components, machinery across your liquefaction trains and all the interfaces to run that, it's just not the same as having a mega where you've got very limited… A 36-inch valve may do the… It's better design, one, being that it's a specialised one large 36-inch valve, whether I've got 20 small four-inch valves or six-inch cryogenic valves… Any one of those could fail at any given time. I think when you've got just a repeated volume of equipment, man, I don't know how to stress that anymore. That's just problematic.

Things smaller seem to freeze up faster than large things do, not that a large equipment can't, but there's just a higher level of reliability built into megas vs a modular build. Plus, the modulars, individual trains cycle in and out while the facility remains producing. Anytime you're bringing something online or something tripped offline on a modular basis, it swings things around. I'm producing X amount of vapour from the boil-off. Okay, I've got liquid. I've condensed it. I'm down to my operating. Now I've tripped it offline. Now I just pulled out X amount of… For the first year of production from Venture Global, we lost every single train, probably 6-10x apiece just chasing control problems, logic problem, instrument-loop problems. Having those things cycle constantly is slowing down production. It swings your whole entire BOG system around, one minute I'm producing… You get this teeter-totter effect going on when the trains are not stable. They're great when they're stable. It just takes a lot of energy and a lot of effort from an operating perspective to get them there.

[00:47:11] How long do you think it'd take for smaller trains to reach the same level of stabilisation and sustain the same nameplate production as larger trains?

LH [00:47:25]: It depends on what… If it's just an unplanned trip, let's say, I had a… For example, just a plug line from a filter that I needed to take off. Now there's mechanisms to… You can keep the train running, circulating, so you keep your cold temperatures. For the most part, you should be able to isolate, warm it up that… Just that one piece. That's usually a 36-48-hour turnaround window to clean a filter. Within 3-4 days, you should be back online, but now if it's a complete… Say, there's no isolation for that particular… If it's a cold box, that's an easy fix. If it's within the train itself, if it's a plug line or you flooded the bottom of your cold box with too much refrigerant in the entire lower half, that's one week's worth of work right there to take it offline, warm it up, thaw it out. Luckily, you can dump all the refrigerant back into the surge vessel, hold it. Then once the unit's thawed out, you're ready to bring it online, then you can just recirculate from the surge drum the refrigerant from a mix point of view and then recirculate that and start to process back up again, but that's usually generally… If it's a complete cold box thaw out, that's a good one week's worth of work, lost production.

[00:49:04] How long do you expect it to take for newly commissioned trains to become stabilised?

LH [00:49:25]: For the modulars, it's a 30-day window. You do, what we call, a static dry out where you just push nitrogen through a pressure-purge process, that takes about one week. You're usually doing that in conjunction with other things that you're preparing for in the unit. While you're doing other activities, you're pressure purging, just pushing nitrogen in, hold for a period and then dumping it completely out. Then once the compressor side of the refrigeration loop is dry, now you're able to start the equipment up and circulate, you're pushing nitrogen through. That takes about another two days. From a dry-out perspective, should take you about one week to get a warmed-up train totally coming from, let's say, I'm returning to service from a shutdown or I'm even commissioning, that takes 30 days. Once that one train comes online, in the case of Venture Global, where you're putting multiple trains online, you should be able to reduce that window by about two weeks for train two. Then each train should take you roughly one week consecutively behind that.

For the first train is 30 days, is one month, four weeks. Train two should be about two weeks. Train three should only be about one week because now you understand where your plugs are going to occur from and how to load the refrigerant and how to watch for freezing. After about train four, you should consistently be able to bring one train after another online from the lessons you learned from the first 3-4 train start-up. A mega train is not like that at all. Mega train is going to take you probably two weeks or two months. Once you're ready to start static dry out, from that point to getting the compressor running is going to be about a good one week to dry that out, but because the loop is so massive, you will circulate for about two weeks primarily to get it completely dry and then to begin to cool that down. It will take you about another two-week window. For a newly-commissioned facility, it's going to be about two months on a mega train. For a newly commissioned modular mid-scale is going to be about one month, to be about 30 days. That's the timeline on mega vs mid-scale.

[00:52:29] When a new mid-scale train and boil-off gas reliquefaction are integrated into the existing Sabine Pass infrastructure, is there a risk of that interfering with the existing trains?

LH [00:52:58]: Are we talking mid-scale or…

CL [00:53:01]: With the new trains.

LH [00:53:07]: No, there's no… We do an extensive, what we call… Here in the US, they use the term SimOps. It's a carryover from international. SimOps is just a concept that's used to segregate one facility from another, one train from another, even if you built one among another train, which is very popular on an international level. Both Cheniere, Sabine Pass and Corpus Christi, both have the real estate to… They typically don't build them integrated right next to each other, but even if they did, there's a very exclusive SimOps or simultaneous operation between dead, recently-raised pig iron that you put in the ground and you build it out, build your train. All the areas around it that could be flammable are completely identified through that SimOps programme. You could potentially put six new trains along six other trains, relatively speaking, of course, there's all the logistics that comes into accessibility, security.

Generally, you build fence lines along your SimOps boundaries that isolates each train, whether it's mega train or it's a modular build, they fence it all out to limit personnel from going from one area into another area, number one, because the security that I'm referring to is a FERC-driven terrorist threat kind of a mentality where I've got to keep my train quarantined from all the other trains from a security point of view, but also from a safety point of view, from flammability, I've also got to be able to maintain all the class 1, division 1 equipment that says, I've got explosive environments where hydrocarbon is coming in contact with electrical equipment. Therefore, I need X amount of boundaries and mechanisms that is going to alert me that I have any potential hazards within that facility.

[00:55:43] Cheniere received FERC's [Federal Energy Regulatory Commission's] approval for roughly 5MTPA of additional capacity from the mid-scale trains through debottlenecking. Are there any constraints that could prevent the company from realising that incremental capacity, especially when you consider that it's already running at high utilisation? Would you think about this as a theoretical peak capacity, or is this actually pragmatic?

LH [00:56:32]: The main risk is that the shared or the common systems… I would watch the refrigeration compressor loading, the motor drive electrical capacity. With multiple mid-scale trains, the biggest bottleneck may not necessarily sit inside one train, but it may emerge from serving all of these aspects of loading your compressor, dealing with all of the equipment at one time. Let me see if I can explain that. Gosh, there's so much that happens in the… It's not like, "Hey, let's just go do this one thing." It's like 20 contractors that are unknown to one another doing various aspects working on your house all at the same time. The left hand may not know what the right hand is doing. Communication is a huge impact. Debottlenecking is a huge difference than a new build. Are you familiar with the term debottleneck?

CL [00:58:24]: Yes.

LH [00:58:25]: It's basically taking a train that you have already and then basically just opening the whole thing up. You're going to rewheel the compressor. Each one of these pieces within the facility for debottlenecking, the trays on the tower are going to be changed out. You've got tower work going on, you've got compressor work going on. All of these things are happening simultaneously. At Cheniere, especially when Bechtel is involved, I have a very high confidence that they can easily manage any debottleneck that can go on. As far as new build, like I was saying earlier, all of that's quarantined. Cheniere at Sabine Pass, they have about 1,400 acres. They have plenty of area to do all the realised work that they're going to do for the new constructability. If it's a debottleneck, that's one type of management process that you go through. If it's a completely new, segregated outside of the other trains where we're going to… Piece off a partial of land. I don't know what their layout is on the new… What they're proposing new. I know they're looking at debottlenecking and expansion, but I don't have any doubt. I have a lot of confidence in Bechtel's ability to manage this. They pretty much partnered with Bechtel to… They're world-renowned. They can bring all the engineering support they need. No, I don't see any issues with new builds or upgrades from a long-term constructability. Heck, they've been building on that plant for 15 years.

CL [01:00:34]: I think that's actually about all we have time for today. I'm going to go ahead and leave it there, but I just want to say thank you for joining me and sharing your insights on Cheniere.

LH [01:00:44]: I hope that was insightful and it's something you could utilise. I appreciate your time and attention on this.

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