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Corpus Christi, TX: Cheniere files permits to build terminal, export LNG

By Mike D. Smith
Posted September 4, 2012 at 11:02 p.m.

CORPUS CHRISTI — Cheniere Energy has filed for permits from the federal government to build its proposed liquefied natural gas terminal in San Patricio County.

The company’s subsidiary, Corpus Christi Liquefaction, applied this past week with the Federal Energy Regulatory Commission, or FERC, to build and operate the terminal along the La Quinta Channel near the Sherwin Alumina plant.

Liquefied natural gas, or LNG, is gas that is supercooled to liquid form for shipping. Cheniere then would export the product overseas.

The terminal — worth in excess of $10 billion — would feature storage tanks, docks and three liquefaction trains, or chilling facilities, each capable of processing millions of tons of natural gas.

Cheniere proposes processing about 1.8 billion cubic feet per day of LNG at the facility, drawn from sources including the gas-rich Eagle Ford Shale formation about 65 miles northwest of Corpus Christi.

The project includes a 23-mile pipeline that will tie in with the regional pipeline network.

Cheniere has more than 660 acres along the San Patricio County shoreline available for development, including a 52-acre piece under lease from the Port of Corpus Christi.

“After an eight month pre-filing process with the FERC, we have determined that our site at Corpus Christi meets all of the requirements of an attractive liquefaction project,” Charif Souki, chairman and CEO of Cheniere, said in a statement.

Cheniere once considered an LNG import facility at the same location. The import project received full approval from the federal government before plans were shelved because of market shifts.

That prior approval may help Cheniere with certain parts of its new export project during the approval process, company spokesman Andrew Ware said.

Company officials anticipate the terminal is on target to begin operation in late 2017.

Cheniere also applied for permission from the U.S. Department of Energy to export as much as 15 million tons per year of LNG from the site.

If approved, the department’s set of permits would allow Cheniere to export to all countries the U.S. has free trade agreements with and those it doesn’t, the company announced.

Due to an oversupply of natural gas in the U.S., low prices have made gas extraction less profitable.

Producers are flaring gas rather than selling it, which makes a case for exporting LNG to other countries, Ware said.

A condition of the Energy Department’s permission is that the company must prove there is an alternative public need for the gas the terminal will process, Ware said.

Cheniere also has applied for corresponding permits through the Texas Commission on Environmental Quality and air permits from the Environmental Protection Agency. The entire permitting process for the site is being marshaled by federal energy regulators, Ware said.

The company expects to have its regulatory approvals and financing commitments secure by early 2014, with construction beginning about that time.

Commercial agreements could be done by the third quarter of 2013.

© 2012 Corpus Christi Caller Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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USA: TCEQ Says Grants Available for Gas Fueling Station

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The Texas Commission on Environmental Quality announced that up to $4.5 million in grants is being made available to eligible individuals, businesses, and governmental entities to support the development of a network of natural gas vehicle fueling stations to serve as a foundation for a self-sustaining market for natural gas vehicles in Texas.

The TCEQ Clean Transportation Triangle grants are part of the Texas Emissions Reduction Plan, and are offered to eligible entities that intend to build natural gas fueling stations along the interstate highways connecting Houston, San Antonio, Dallas, and Fort Worth.  These fueling stations must be located no more than three miles from the interstate highways and must be made available to the public.

CTT program goals include ensuring that natural gas vehicles purchased, leased or otherwise commercially financed, or re-powered under the Texas Natural Gas Vehicle Grant Program have access to fuel; and building the foundation for a self-sustaining market for natural gas vehicles in Texas.

Grants are offered to eligible applicants, with preference to be given to stations providing both liquefied natural gas and compressed natural gas at a single location; and stations located not more than one mile for an interstate highway system.

Application deadline is April 16, 2012.

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Energy industry has lots of bureaucracy to deal with

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Alex Mills
Posted September 11, 2011 at 12:19 a.m.

President Obama’s opinions about the petroleum industry aren’t very nice. He would like for it to vanish overnight to be replaced by wind, solar and other forms of “clean” energy.

The President, being the intelligent man that he is, knows that wishing won’t make it happen. He knows that his beloved “renewables” can’t compete in today’s economy even at $100 oil.

The President does have tremendous powers at his disposal, and that is the power of the federal bureaucracy. What he cannot impose on industry through the legislative process, he tries it through the bureaucratic process.

One of the first things Obama did as President was proposed to increase taxes on the U.S. oil and gas industry. He sent Secretary of Treasury Timothy Geithner to Congress to testify that percentage depletion and expensing of intangible drilling costs distorted crude oil and natural gas markets by creating and oversupply of energy.

With that kind of logic there is no wonder that the nation’s economy is in crisis.

Repealing tax provisions as outlined in President Obama’s budgets of 2010, 2011 and 2012 will discourage drilling and production, increase oil imports, put more pressure on increasing petroleum costs, and hinder job growth in the U.S.

Increasing taxes during a recession is ill advised, especially on one of the few industries that has experienced job growth. The number of Texans on oil and gas industry payrolls totaled an estimated 230,400, about 33,100 (16.8 percent) more than in July 2010, according to the Texas Workforce Commission. The number of upstream oil and gas workers in Texas peaked in October 2008 at an estimated 223,200, following a revision to reflect new industry employment data for 2009 and 2010.

Obama’s bureaucracy powers only begin with the Treasury Department. His Interior Department has slowed down to a crawl the approval of permits to drill on federal onshore and offshore leases. The stories of the feds dragging their feet in the Gulf of Mexico is well documented, but the same holds true for many permits onshore out west.

And, Obama’s Environmental Protection Agency (EPA) has tried to kill the oil and gas industry through a myriad new interpretations of old laws that would make it virtually impossible for the industry to get in compliance at almost any cost.

One of the most onerous new requirement comes from EPA’s proposed greenhouse gas (GHG) permitting program for utilities and refineries in Texas only. EPA’s unprecedented action comes after 18 years of successful regulation by the Texas Commission on Environmental Quality (TCEQ). Texas’ air permitting program has successfully reduced harmful emissions in the state at a higher rate than most other states. Emissions data cited by the Governor’s Office indicates that the Texas clean air program achieved a 22 percent reduction in ozone and a 46 percent reduction in nitrous oxide, which outpaces the 8 percent and 27 percent recorded nationally.

It is estimated that 167 plants will be affected. Will power plants and refineries close if they are unable to obtain a federal permit? If closed, how will oil and gas producers be able to get the products to a market? Will shortages of refined product and electricity occur? What impact will the shortages have on price, jobs and the economy? What changes will the regulations have on domestic production and oil and gas imports?

Additionally, EPA and the Department of Energy are conducting their own studies of hydraulic fracturing, which has been regulated by the states for more than 50 years.

The Commodities Futures Trading Commission, the Federal Energy Regulatory Commission and the Federal Trade Commission are all examining and regulating the trading of crude oil and natural gas on the commodities markets.

And, just recently the Securities and Exchange Commission announced that it will begin an investigation of oil and gas companies to make certain that potential investors are sufficiently notified of the possible liabilities associated with hydraulic fracturing.

That’s a lot of bureaucrats looking over your shoulder.

Despite all of the regulatory morass, the industry continues to push forward. Just imagine what could happen if the federal government became a friendly partner instead of an adversary.

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