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.

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