* Tanker will offload commissioning cargo on Monday
* Second cargo expected on June 27-28
* Terminal comes online as U.S. gas production hits record
* Terminal will likely sit unused like others-analysts
(Recasts, adds detail throughout, analyst comment)
By Edward McAllister
NEW YORK, June 8 (Reuters) - El Paso's EP.N new liquefied natural gas terminal in Mississippi will begin operations next week but may join the ranks of idle import facilities in the U.S. as domestic gas production rockets.
Completion of El Paso's $1.1 billion Gulf LNG terminal marks the end of a busy but ill-fated period in U.S. LNG terminal development.
"It is more than the end of an era -- it's beyond the end of an era. It will be the last terminal built in a long time," said Zach Allen, president of Pan Eurasian analysts in Raleigh North Carolina.
Nearly $5 billion has been poured into LNG import terminals over the past decade on the expectation that the United States would be a major importer of natural gas. But since the corner stones were laid, huge domestic production increases have unexpectedly evaporated the need for imports.
Brand new terminals expected to receive several cargoes a month now sit unused for much of the year. Resigned to that fate, one terminal operator -- Excelerate Energy -- has decided to dismantle its terminal offshore Louisiana after not receiving a cargo for years. [ID:nN19122052]
In an about-turn, other importers have instead applied for licenses to liquefy and export U.S. gas abroad.
El Paso said on Wednesday it will receive two cargoes this month for testing purposes, both delivered by BG Group BG.L.
The first cargo, from Trinidad, is already anchored near the terminal and will dock on Monday June 23, project coordinator David Porco told Reuters on Wednesday. The second will arrive on June 27 or 28 from Egypt.
Porco said that Gulf LNG will look at re-export and possible liquefaction, but for now it is concentrating on getting the import terminal up and ready.
Gulf LNG will have the capacity to process up to 1.3 billion cubic feet (bcf) per day of LNG. Two on-site storage tanks have a combined capacity of up to 6.6 bcf.
But beyond these first test cargoes, it is unclear where tankers will come from, or why shippers would send cargoes to the terminal when they can fetch much higher prices in Europe or Asia.
"I don't know what they will do with the terminal," Allen said.
Future deliveries are expected to arrive from Angola LNG -- state-owned oil company Sonangol has import capacity at the terminal -- but Angola LNG is not expected online until next year.
U.S. gas production will hit a record high this year, according to the Department of Energy, thanks to increases in shale gas production brought about by new drilling and extraction technologies.
Since shale production revolutionized the U.S. gas market in 2007, U.S. LNG imports have halved, leaving terminal developers scrambling. As well as proposing liquefaction facilities, some have begun re-exporting cargoes to increase flexibility.
The Gaslog Singapore tanker, which can hold up to 155,000 cubic meters of LNG, set anchor near Pascagoula on Wednesday, according to AISLive ship tracker, and it will dock and offload next week. (Reporting by Edward McAllister; Editing by Marguerita Choy)