By Naureen S. Malik

(Bloomberg) — It’s official. The pure fuel flowing out of America’s shale formations is now accessible to the world.

The liquefied pure fuel tanker Asia Vision left Cheniere Energy Inc.’s Sabine Pass export terminal in Louisiana on Wednesday with the primary cargo of U.S. shale fuel, in response to Sabine Pilots, the group that helps information vessels by the area’s waterway. The tanker, carrying 3 billion cubic toes, is certain for Brazil.

The first U.S. export couldn’t have come at a worse time for the nation’s fuel suppliers. Low crude costs are weighing on the worldwide LNG market, as contracts for the gas are sometimes linked to grease. A provide glut can be rising as different international locations together with Australia ramp up export capability whereas demand development elsewhere slows. The worldwide surplus threatens to maintain U.S. provides swelling and home fuel costs beneath $2 per million British thermal models.

“The bearish realities of this market are so big that this is like howling at the moon and expecting it to move,” mentioned Jason Schenker, president of Prestige Economics LLC in Austin, Texas. “You are not going to get a big reaction.”

Natural fuel futures fell 2.7 % to $1.73 per million British thermal models, the bottom stage since Dec. 18, by 11:55 a.m. London time Thursday on the New York Mercantile Exchange. Cheniere shares soared 10 % to shut at $33.62 in New York Wednesday.

‘Great American Story’

Cheniere didn’t instantly reply to a request for touch upon the tanker pulling away. Sabine Pilots dispatcher Robbie Almond mentioned by cellphone late Wednesday that the tanker was “heading offshore and will now go to its destination.”

The vessel was final seen crusing south within the Gulf of Mexico, in response to ship-tracking information on Bloomberg.

The Sabine Pass terminal is a testomony to the dramatic shift within the U.S. fuel market over the previous decade. It started as an import complicated and was was an export website after hydraulic fracturing and horizontal drilling began unleashing extra fuel from shale formations than the U.S. might burn by itself.

“It’s definitely a big deal for North America,” Jason Lord, LNG analyst for vitality information supplier Genscape Inc., mentioned by cellphone. “It’s going to make the U.S. into a net natural gas exporter in the coming years.”

Neal Shear, Cheniere’s interim chief government officer, described the primary cargo as a “great American story.”

“It’s really awe-inspiring,” Shear mentioned in an interview with Bloomberg on the CERAWeek vitality convention in Houston on Wednesday.

Petroleo Brasileiro SA, Brazil’s state-owned vitality firm, purchased the primary export at “market price,” in response to the corporate. It mentioned one other tanker is scheduled to take a second cargo inside days.

Chilling Gas

Cheniere’s Sabine Pass plant chills fuel right into a liquid, shrinking the gas to 1/600th of its unique quantity, so it may be loaded onto tankers. Cheniere delayed the terminal’s first cargo from late January to carry out wiring repairs. The firm mentioned in January that it might profitably promote LNG regardless of decrease costs, although margins could also be as little as $1 per mmBtu to Europe.

While preliminary export volumes will likely be small from the decrease 48 states, the U.S. is becoming a member of Australia, Malaysia and Angola in increasing LNG manufacturing capability by a complete of 12 % this 12 months, in response to Energy Aspects Ltd.

“It has been obvious for a while that it’s going to be an unpleasant price environment,” mentioned Jason Feer, head of enterprise intelligence at Poten & Partners in Houston. “The problem for everyone in the LNG business is that prices are already quite low.”

© 2016 Bloomberg L.P