Golden Pass Products Wins Approval from U.S. DOE to Export LNG

Golden Pass Products said it has received authorization from the United States Department of Energy to export domestically produced natural gas as liquefied natural gas from the Golden Pass LNG terminal in Sabine Pass, Texas, to nations that have existing Free Trade Agreements (FTA) with the U.S.

The proposed project involves construction of natural gas liquefaction and export capabilities at the existing Golden Pass LNG facility. If developed, the project would represent approximately $10 billion of investment on the U.S. Gulf Coast, generating billions of dollars of economic growth at local, state and national levels and millions of dollars in taxes to local, state and federal governments. The project would generate approximately 9,000 construction jobs over five years with peak construction employment reaching about 3,000 jobs.

The proposed project would have the capacity to send out approximately 15.6 million tons of LNG per year. New infrastructure required to export will be located on the existing property, which contains two berths for LNG tankers, five storage tanks and access to the Golden Pass pipeline. The expanded facility would then have the capability and flexibility to both import and export natural gas.

As noted in the FTA application, Golden Pass also plans to submit an application to export LNG to non-FTA nations. A final investment decision will be made following government and regulatory approvals and will be based on a range of factors.

Golden Pass Products Wins Approval from U.S. DOE to Export LNG LNG World News.

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Obama Politics: Gas-Export Study Delay Puts U.S. Projects in Limbo for This Year

By Jim Snyder

Sep 18, 2012 2:14 PM CT

The Energy Department’s delay in releasing a report on liquefied natural-gas exports puts in limbo for this year as many as 12 applications including projects backed by Dominion Resources Inc. and Sempra Energy. (SRE)

The department commissioned the study last year to assess the economic impact of exports on domestic energy use after granting Cheniere Energy Inc. (LNG) permission to ship gas from Louisiana. It said future permits won’t be issued until the study is completed.

The first part of the study is complete, and a second portion was scheduled to come out in the first quarter. That date was pushed back to late in the U.S. summer, which ends Sept. 22. A posting on the department website now says it will be “complete by the end of the year.”

“It is really unfortunate, but I don’t think anything happens until we see the results of that report,” said Bill Cooper, president of the Center for Liquefied Natural Gas, which advocates for gas shipments. The Washington-based group includes LNG producers, shippers and terminal operators.

“None of the applicants, I’m certain, want to see a delay in the regulatory process,” Cooper said in an interview.

The study was started after lawmakers led by Representative Edward Markey, a Massachusetts Democrat, and Senator Ron Wyden, an Oregon Democrat, said overseas sales might increase domestic energy prices.

The delay probably will push release of the Energy Department’s report until after the election in November.

‘Complicated Analysis’

“This is a complicated economic analysis assessing a dynamic market,” Jen Stutsman, an Energy Department spokeswoman, said in an e-mail. “We take our responsibility to issue these determinations seriously and want to make sure the necessary time is taken to get it right.”

Investors including Sempra Energy in partnership with Mitsubishi Corp. and Mitsui & Co. Ltd., Freeport LNG with Macquarie Group Ltd., and Dominion Resources, have applied for approvals from the Energy Department.

U.S. permits are required to sell gas to countries that aren’t free-trade partners with the U.S., a group that includes Japan and Spain.

As natural-gas prices soared in the last decade, energy companies sought permission to build import terminals. Hydraulic fracturing, or fracking, for natural gas has opened access to reserves that previously couldn’t be produced economically, driving prices to a decade low and letting companies shift gears and seek overseas buyers for the fuel.

In fracking, oil and gas companies shoot a mixture of water, sand and chemicals underground to crack shale rock formations and free fossil fuels trapped inside.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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USA: Golden Pass Files with DOE to Export LNG

Golden Pass Products, a partnership of Qatar Petroleum International and ExxonMobil affiliates, has submitted an application to the U.S. Department of Energy (DOE) to export liquefied natural gas (LNG) from the Golden Pass LNG receiving terminal at Sabine Pass, Texas.

The proposed project involves construction of natural gas liquefaction and export capabilities at the existing Golden Pass LNG facility. A final investment decision will be made following government and regulatory approvals.

If developed, the project would represent approximately $10 billion of investment on the Gulf Coast, generating billions of dollars of economic growth at local, state and national levels and millions of dollars in taxes to local, state and federal governments. The project would generate approximately 9,000 construction jobs over five years with peak construction employment reaching about 3,000 jobs.

The proposed project would have the capacity to send out approximately 15.6 million tons of LNG per year. New infrastructure required to export will be located on the existing property, which currently contains two berths for LNG tankers, five storage tanks and access to the Golden Pass pipeline. The expanded facility would then have the capability and flexibility to both import and export natural gas.

The proposed expansion of Golden Pass is an opportunity to capitalize on America’s abundant natural gas resources. The Energy Information Administration’s Annual Energy Outlook 2012 shows that the United States has substantial gas supplies that can support gas exports, including LNG exports, over the longer term.

The application filed with the DOE is to export natural gas to nations that have existing free trade agreements (FTA) with the United States. A similar application is planned for non-FTA countries.

Source

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EIA: U.S. Gas Pipeline Companies Added 2,400 Miles of New Pipe in 2011

The U.S. Energy Information Administration said in a report that it estimates that U.S. natural gas pipeline companies added about 2,400 miles of new pipe to the grid as part of over 25 projects in 2011.

New pipeline projects entered service in parts of the U.S. natural gas grid that can be congested: California, Florida, and parts of the Northeast. Only a portion of this capacity serves incremental natural gas use; most of these projects facilitate better linkages across the existing natural gas grid, the EIA said.

By convention, the industry expresses annual capacity additions as the sum of the capacities of all the projects completed in that year. By this measure, the industry added 13.7 billion cubic feet per day (Bcf/d) of new capacity to the grid in 2011. The six largest projects put into service in 2011 added 1,553 miles and about 8.2 Bcf/d of new capacity to the system. Much of this new capacity is for transporting natural gas between states rather than within states. Golden Pass, Ruby Pipeline, FGT Phase VIII, Pascagoula Expansion, and Bison Pipeline projects added 6.1 Bcf/d, or about 80%, of new state-to-state capacity.

The EIA said that natural gas pipeline capacity additions in 2011 were well above the 10 Bcf/d levels typical from 2001-2006, roughly the same as additions in 2007 and 2010, but significantly below additions in 2008 and 2009. Capacity added in 2008 and 2009 reflected a mix of intrastate and interstate natural gas pipeline expansions, related mostly to shale production, liquefied natural gas (LNG) terminals, and storage facilities.

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U.S. Shale Gas Exports Face Hurdles, Former Exxon CEO Says

By Kari Lundgren – Feb 10, 2012 4:55 AM CT

Political constraints and concern production gains at shale fields aren’t sustainable will hinder the development of liquefied natural gas export plants in the U.S., former Exxon Mobil Corp. (XOM) chief Lee Raymond said.

“There is going to be a big debate in the U.S. as to whether or not they’re going to permit the export of liquefied natural gas,” Raymond said in an interview in Oslo yesterday. “Even if you get past the politics, you have to test whether or not the resource base is sufficient.”

New techniques to access the natural gas trapped in shale rocks, including the use of hydraulic fracturing and horizontal drilling, have transformed the U.S. into the world’s largest gas producer. Estimates suggest fields in Pennsylvania, Ohio and Texas may contain as much as 862 trillion cubic feet of the fuel, enough to supply the U.S. for over thirty years at current consumption.

Politicians including Democrats Senator Ron Wyden of Oregon and Representative Edward Markey of Massachusetts have said exports may raise domestic gas prices. In allowing exports, the U.S. may be “trading away the enormous economic advantage of having large, low-cost domestic natural gas supply,” Wyden said in an e-mailed statement on Jan. 6. “It’s going to be a little while before people are really confident that there is going to be a sufficient amount of gas for 30 years to support the construction of an LNG plant,” said Raymond, who stepped down in 2005. “I’m frankly not sure that we have enough experience with shale gas to make the kind of judgment you’d have to make.”

Global Supply

Some gas-industry players are confident the U.S. will become a major exporter. BG Group Plc (BG/) said yesterday that the U.S. will be able to supply about 9 percent of global liquefied natural-gas output by the end of the decade. The U.K.’s third- largest gas producer said the U.S. will have the capacity to export about 45 metric million tons of LNG a year from 2020.

Rising production of natural gas has driven down prices and is leading owners of import terminals to explore exports. Cheniere Energy Inc. has proposed a liquefaction facility at its Sabine Pass terminal, which would be the first new North American export project since 1969. BG has a preliminary agreement to take gas from Sabine Pass.

The cost of building an LNG (LNG) terminal runs to billions of dollars. Cheniere’s Sabine Pass terminal will have a capacity of 9 million tons a year. Construction costs at projects underway in Australia, have reached $4,000 a ton of capacity, according to analysts at Sanford C. Bernstein & Co.

‘Huge Investments’

“If you build any LNG, from a producer’s point of view, you can only do that from an economic point of view if you’re assured that you have a long-term competitive supply because these are huge investments,” Raymond said.

Exxon, the world’s largest energy company by market value, is pursuing shale exploration in Argentina, Poland and the U.S. The company said earlier this month that two exploratory wells drilled in a Polish shale formation last year weren’t commercially viable. The gas discovered failed to flow in sufficient quantities Texas-based Exxon said Feb. 1.

“There’s lots of shale around the world, but just because it has the name shale on it doesn’t mean it’s something that would be economic to try to develop by the technique being used largely in the U.S.,” Raymond said.

Production of shale gas in China would be a “real game changer,” the former executive added. “China is run by engineers, it’s not run by politicians.”

“They’re technically competent and they approach things in the same way a good engineering group at a major oil company would approach things,” he said.

Source

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Energy secretary backs natural gas exports

The low price of natural gas is hurting domestic job growth, and exporting a small amount of the fuel will boost the economy, U.S. Energy Secretary Steven Chu told a Houston audience Thursday.

Speaking at a town hall at Houston Community College, Chu said a modest increase in the price of natural gas wouldn’t significantly raise its cost to U.S. consumers who use it to heat their homes and manufacturers who need it to make products.

Natural gas futures closed at $2.55, up 17 cents, in trading Thursday on the New York Mercantile Exchange. It brings much higher prices in other countries.

“Exporting natural gas means wealth comes into the United States,” Chu said.

The Energy Department’s Office of Fossil Energy is reviewing several applications to export liquefied natural gas. The exports would relieve the glut of natural gas on the domestic market and raise revenue, but also potentially increase prices for domestic consumers.

Several U.S. energy companies have announced plans to close their natural gas wells and curb spending in natural gas fields, as its price has fallen from more than $13.50 in 2008.

In his State of the Union speech last week, President Barack Obama called for an “all-of-the-above” approach to domestic energy production, including investment in oil, natural gas and renewable energy sources.

Chu said it’s important that the United States be at the forefront of innovations and technologies in renewable energy.

“We have a choice. When all these things become cost-competitive, do you want to buy or do you want to sell?” he asked. “If we are buying, that is wealth out of the country. If we are selling, that’s wealth into the country.”

Before the hour-long session with students at the college, Chu met with oil and gas executives and explored the Texas Medical Center’s energy efficiency upgrade.

At the college, he answered questions about the Obama administration’s rejection of the Keystone XL pipeline and Iran’s threat to close the Strait of Hormuz, among other topics.

Chu said the administration is open to exploring alternate routes for the pipeline that would carry oil from Canadian tar sands to Gulf Coast refineries.

It’s become a touchstone issue for supporters who say it will create jobs and reduce U.S. dependence on oil from hostile nations, and opponents who argue it could threaten water supplies and promote use of an especially dirty form of oil.

Photo: Melissa Phillip / © 2011 Houston Chronicle

 

Chu said he supports construction of pipelines nationwide, particularly to relieve the glut of oil at the hub in Cushing, Okla., a major price point for domestic oil.

“There is such a shortage of pipelines between Cushing and Houston,” Chu said. “There will be major construction of pipelines in the next decade or so. All the job creation from Cushing to Houston is being done now.”

Chu touted government investment in wind, solar and other renewable energy sources, as well. He said he expects the cost of solar power to fall by 50 percent within six to eight years.

Chu also dismissed Iran’s threats to close the Strait of Hormuz, a key oil shipment channel, in retaliation for international sanctions aimed at the nation’s nuclear program.

“I don’t think they can really shut down the Strait of Hormuz,” Chu said. “We certainly have capabilities to reopen it.”

simone.sebastian@chron.com @SimonesNews

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USA: Golden Pass LNG Plans Re-Exports

The U.S. Golden Pass LNG Terminal (GPLNG) said Wednesday it will seek the necessary authorizations from the U.S. Department of Energy to re-export LNG that has previously been imported into the United States and stored at the terminal.

GPLNG intends to receive foreign-sourced LNG at its terminal facility, store such volumes of LNG temporarily at its terminal, and then send it out of the terminal for export to foreign markets.

The Golden Pass LNG Terminal said in a statement to DOE that the original design of the terminal incorporated the ability for the terminal to load onto ships LNG stored at the terminal.

Therefore, no new facilities and no modifications of existing facilities will be required in order to provide re-export service.

GPLNG will, however, need to modify its existing operating procedures to address the proposed re-export activities, it said in a statement.

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DOE to halt issuing LNG export licenses

06 Dec 2011 20:21 GMT

Washington, 6 December (Argus) — US Department of Energy (DOE) will not grant additional licenses to export domestically-produced natural gas to all international markets until completing a review of cumulative economic impacts of liquefaction projects on US markets, a senior agency official said today.

The federal energy regulators appear to be sensitive to political pressure that could arise if LNG exports from the US lift domestic natural gas prices. The agency could reconsider the already granted applications if energy security or other factors are an issue, according to John Anderson, manager of natural gas regulatory activities at DOE’s Office of Fossil Fuels.

Developers have proposed six US liquefaction projects encompassing a total export capacity of 69mn t/yr, or the gas equivalent of 9.5 Bcf/d (269mn m³/d), based on agency records. Cheniere Energy’s proposed 2.2 Bcf/d Sabine Pass liquefaction plant in Louisiana secured DOE permission to export to all international markets in May, following an eight-month review.

But other proposed projects will have to wait until DOE reviews two studies it has commissioned to look into cumulative impacts of liquefaction projects and exports, Anderson said today in Washington, DC, during a briefing hosted by the US Energy Association.

The studies are expected to be completed in the first quarter of 2012, he said.

A study by the Energy Information Administration (EIA) will focus on the effect of LNG exports on domestic prices of natural gas. That EIA study will serve as the basis for analyzing cumulative economic effects of LNG exports that will be conducted by an external contractor.

In addition to cumulative impacts, the agency is looking at adequacy of US natural gas supply, energy security, impact on GDP, balance of trade and other criteria in informing its decision in granting blanket licenses, Anderson said.

A critical factor appears to have been omitted: a project’s commercial viability. Unlike the Federal Energy Regulatory Commission, DOE does not require developers to prove viability, focusing only on analysis of what happens if the terminal is built, Anderson said.

Economic modeling accompanying project applications just assumes that exports are taking place, consultancy ICF International‘s vice president Harry Vidas said during the briefing. ICF prepared the economic analysis that accompanied Cove Point’s application with DOE.

Since commercial viability is not a criterion, projects are effectively considered on the first come-first serve basis. Developers who filed first may secure export licenses and preclude subsequent projects from being realized because of perceived cumulative impact of exports on domestic prices, even if the initial projects are never built.

That scenario is hypothetical, Anderson said, even though it has analogies in the past since only a fraction of proposed US LNG import terminals were built over the past decade.

If economic circumstances change in the future, “we can modify any [export license] order although we respect contract sanctity,” he said.

US laws allow DOE to direct natural gas producers to curtail sales or allocate them to what the federal regulators consider a higher-priority use, according to Anderson.

“We would not want to use [that authority], but we can,” he said.

Source & Proposed North American liquefaction projects

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