U.S. energy regulator approves Sempra LNG export project

Reuters

(Adds Sempra statement paragraph 5 and details from order)

By Ayesha Rascoe

WASHINGTON, June 19 (Reuters) - U.S. regulators on Thursday approved Sempra Energy's bid to build a liquefied natural gas export terminal in Louisiana, opening the door to a significant expansion of the American role in global gas trade.

Sempra's Cameron LNG facility was the second gas export project to get the green light to begin construction from the Federal Energy Regulatory Commission and the first since 2012, when FERC permitted Cheniere's Sabine Pass project.

With the FERC approval in hand, Cameron will likely soon receive its final permit from the Energy Department allowing the facility to export gas to all countries, which would make it the only project outside of Sabine Pass fully licensed at the federal level.

The Energy Department issued a conditional export permit for Cameron in February, contingent upon the project receiving a construction license from FERC.

"Today's approval is another important step in delivering natural gas to America's trading partners abroad," Debra Reed, chief executive of Sempra Energy, said in a statement.

Cameron, Sabine Pass and more than two dozen other projects are in a race to sell relatively cheap, abundant U.S. shale gas to foreign countries where it can fetch higher prices.

A vocal coalition of heavy industrial companies, led by Dow Chemical, has argued that this push for gas exports could raise domestic energy prices and hurt the economy if left unchecked.

But many Republicans and some Democrats from gas-producing states have pressed for federal regulators to move quickly to issue decisions on applications, warning that the United States could lose out to other countries such as Qatar and Australia seeking to export natural gas.

Companies must receive approval from FERC regarding the safety and environmental impact of their projects before they can begin construction.

The commission's order required Sempra to comply with more than 75 conditions to mitigate the project's effects on the surrounding area.

The Energy Department determines whether requests to export LNG to countries without free trade agreements with the United States are in the national interest.

Sempra shares, which posted record highs on Wednesday and early Thursday in anticipation of FERC approval, were near steady at $104.10 in midday U.S. trading.

Approval of the Cameron project comes as FERC's review process faces greater public scrutiny. An Energy Department proposal made in May, currently out for public comment, would require companies to have a construction license from FERC before DOE will act on their export applications.

(Editing by Jonathan Oatis and Grant McCool)

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