LNG exports boost U.S. natural gas producers (Part 3 of 5)
Current and upcoming LNG export facilities
According to the U.S Energy Information Administration (or EIA) figures available until April 24, 2012, nine projects have been applied to the Department of Energy (DOE) for authorization to export domestically produced liquefied natural gas (or LNG) to free trade agreement (FTA) and non-free trade agreement (non-FTA) countries. This totaled 14 billion cubic feet (bcf) per day of capacity. According to the figures available from Federal Energy Regulatory Commission (FERC), as of June 20, 2014, two export terminals have initiated the application process with FERC for approval to build liquefaction facilities. DOE has final approved two proposals as of date—the Sabine Pass facility of Cheniere Energy (NGL) and the Cameron LNG facility of Sempra Energy (SRE). Almost all other terminals have received DOE approval to export LNG to FTA countries, but they haven’t received DOE approval to export LNG to non-FTA countries.
Sempra Energy’s export project
On June 19, 2014, Sempra Energy (SRE) received the approval from the FERC to build an export terminal for liquefied natural gas. Sempra’s Cameron LNG re-gasification terminal in Hackberry, Louisiana is capable of processing ~1.8 bcf of natural gas per day. Sempra is developing the project in a partnership with Mitsubishi Corporation and Mitsui & Co. Ltd. A subsidiary of the GDF SUEZ S.A. project is expected to be comprised of three liquefaction trains. For an estimated cost of $9–$10 billion, SRE expects to achieve full production in 2019. Earlier, in the conference call of 1Q14 earnings, Debra Reed, the chief executive officer (or CEO) of SRE had said, “On our Cameron liquefaction project we are happy to announce that FERC completed its environmental review process and published the final environmental impact statement on April 30. We are now awaiting the final FERC permit which we should receive this summer. This is an important milestone and we expect to be the second U.S. LNG Export Project to begin construction.”
Cheniere Energy’s projects and proposals
NGL’s Sabine Pass export plant, now under construction in Louisiana, received approval of both the FERC and the Energy Department. The facility would’ve re-gasification capacity of approximately 4 bcf per day. As of February, 2014, the project completion for the two trains was approximately 61%. LNG anticipates that Train 1 will start to produce by late 2015. Cheniere has sold to third parties, under 20-year contracts, approximately 16 metric ton per annum (mtpa) of the 18 mtpa of LNG to be produced from four trains as anticipated by the company. Additionally, further expansion is under development for Trains 5 and 6. Please read the following section on Cheniere’s complete LNG exports project.
Higher LNG exports would be positive for the energy companies active in the business of liquefaction of natural gas. Government regulatory approvals for LNG exports have benefited companies like Sempra Energy (SRE) and Cheniere Energy Inc. (LNG). Energy Transfer Partners (ETP), El Paso Pipeline Partners (EPB), Dominion Energy (D), and Exxon Mobil (XOM) are some of the other companies that will also benefit if their pending applications are approved by the DOE and FERC. SRE is a component of the Utilities Select Sector SPDR (XLU) and Cheniere Energy is a part of the Vanguard Energy ETF (VDE). EPB is a component of the MLP ETF (MLPA).
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