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USA: Magnolia LNG Wins DOE Approval for FTA Exports

Liquefied Natural Gas Limited said that the Office of Fossil Energy of the Department of Energy (DOE), United States, has granted authorisation for Magnolia LNG to export up to 4 mpta of LNG, from its proposed LNG project site at the Port of Lake Charles, Louisiana.

The DOE authorisation is valid for LNG sales to commence within 10 years and is then for a period of 25 years from first LNG sales; which sales are permitted to all existing, and any future, countries that have, or enter into, a Free Trade Agreement with the Government of the United States.

The Magnolia LNG Project comprises the proposed development of an 8 mtpa LNG project on a 90 acres site, in an established LNG shipping channel in the La ke Charles District. The project is based on two 4 mtpa development phases, each phase comprising 2 x 2 mtpa LNG production trains, and will use the Company’s wholly owned OSMR ® LNG process technology.

The DOE authorisation, follows the Company’s recent si gning of a Site Option to Lease Term Sheet, with the Lake Charles Harbour & Terminal District (Port Authority. The Company is now:

  • Negotiating a definitive and binding Real Estate Le ase Option Agreement with the Port Authority, together with the agreed form of Lease to be executed on Magnolia LNG, LLC exercising the site Lease Option;
  • In discussion with a number of parties who have expr essed interest to enter in to a Tolling Agreement, under which the Tolling Party will be responsible for arranging gas suppl y to the Magnolia LNG Project and the LNG buyers and ships. The Magnolia LNG Project will treat and liquefy the gas, store the produced LNG and load the LNG onto the LNG buyer’s ships, in consideration of a Capacity Fee and Processing Fee; and
  • Progressing work on the Magnolia LNG Project’s Pre File Application, which is required to be submitted to the Federal Energy Regulatory Co mmittee and represents the commencement of the project’s required permits and approvals process.

Managing Director Maurice Brand said “We are very pleased that the DOE authorisation had been received in accordance with the Company’s developmen t schedule. Our ability to meet key milestones will be a critical factor in discussions with potential Tolling Parties.”

USA: Magnolia LNG Wins DOE Approval for FTA Exports LNG World News.

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.

USA: Western States Lawmakers Call for Quicker Approval of LNG Export Applications

The Center for LNG praised a bipartisan group of 16 House Members who called for an expedited review process for applications to export liquefied natural gas (LNG).

The legislators – all representing districts in the western region of the United States – sent the letter to Steven Chu, Secretary of the U.S. Department of Energy (DOE), where all LNG export applications must be reviewed.

Led by Reps. Cory Gardner (R-Colo.) and Jim Matheson (D-Utah), the lawmakers noted that “Creating more opportunities to sell natural gas into global markets and access overseas customers could help the goals of increasing natural gas use and smooth out historical boom-bust cycles. Realizing sustainable natural gas prices will continue to stimulate the resurgence of U.S. manufacturing, power generation, chemical and agriculture sectors, as well as continue to keep costs low to heat our homes and fuel our nation’s transportation needs.”

The Center for LNG, a trade group representing the LNG industry, agreed with the lawmakers.

“Restarting the permitting process for LNG facilities would give the United States a unique opportunity to generate more public revenues, increase investment in the U.S. economy, create new jobs, and reduce our trade deficit,” said Center for LNG president Bill Cooper. “Promoting exports is a longstanding policy in the United States, including the President’s National Export Initiative, which is designed to create jobs by doubling U.S. exports by 2015.”

Yesterday’s letter follows a similar effort from earlier this summer, when a bipartisan group of 44 House lawmakers from Texas and Louisiana also wrote to DOE to encourage an expedited review of LNG facilities, bringing the total number of House Members supporting expedited approval to 82.

“This is yet another indication that Americans are ready to get back to work. Approving LNG export facilities would be a significant source of new jobs and will help re-grow our struggling economy,” Cooper added.

Three Democrats and 13 Republicans representing the states of Arizona, California, Colorado, Kansas, Nebraska, Nevada, New Mexico, Utah, and Wyoming all signed the letter.

Western States Lawmakers Call for Quicker Approval of LNG Export Applications, USA LNG World News.

Port Lavaca, TX: Excelerate Wins US Approval to Export LNG

The United States Department of Energy has granted Excelerate Energy a long-term, multi-contract authorization to export liquefied natural gas (LNG) to free trade agreement (FTA) nations from its Lavaca Bay LNG project, currently under development.

The company will be authorized to export up to 10 million metric tons per annum (mtpa) of LNG produced from domestic resources for a 20-year term commencing on the date of its first export.

Located on the Texas Gulf Coast, Lavaca Bay LNG will be the first floating liquefaction export facility in the United States and will utilize Excelerate’s Floating Liquefaction Storage Offloading vessel (FLSO™) technology.

The facility will require authorization from the Federal Energy Regulatory Commission (FERC).

Excelerate will begin the FERC pre-filing process fourth quarter 2012 and expects the facility to be in-service in 2017.

Excelerate Wins US Approval to Export LNG LNG World News.

BP Gets Approval for South China Sea Exploration

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The Ministry of Commerce, People’s Republic of China, has granted consent to British Petroleum (BP), for an exploration drilling in the South China Sea in partnership with CNOOC, China Daily reveals today.

BP and the block operator CNOOC signed a deal for the exploration at the 43/11 deepwater block in South China Sea in January last year, but the agreement was subject to the Government’s approval.

This is BP’s second project in the deep waters of South China Sea after it had bought a stake in the Block 42/05 from Devon Energy China Ltd., in September 2010.

China daily reports that the partners in the project plan to use China’s first and only home made deepwater semi-submersible drilling rig Offshore Oil 981.

Asked when the exploration drilling would begin, BP China President Chen Liming told Reuters: “When we start depends on many factors, such as whether the drilling rig is ready. We hope to start drilling there by the end of the year.”

BP has been operating in China since the early 1970s and has business activities which include offshore gas production, chemical joint ventures, LPG import and marketing, oil product and lubricant retailing, chemicals joint ventures manufacturing ,technology licensing etc. According to China Daily, the British oil giant has so far invested more than USD 5 billion into China.

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USA: Sempra Wins DOE Approval for Cameron LNG Export

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The U.S. Department of Energy granted Sempra a long‐term authorization to export up to the equivalent of 1.7 Bcf/d of natural gas as LNG to FTA countries for 20 years from the proposed Cameron, Louisiana, LNG liquefaction plant.

The ruling paves the way for a second approval allowing Sempra to export LNG to all LNG import nations, with or without U.S. free trade agreements.

Cameron LNG is situated on a 260-acre industrial-zoned site along the Calcasieu Channel in Hackberry, Louisiana. It is located 18 miles from the Gulf of Mexico and within 35 miles of five major interstate pipelines that serve nearly two-thirds of all U.S. natural gas markets.

The $900 million LNG terminal is currently capable of processing up to 1.5 billion cubic feet of natural gas per day.

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BOEM: Conditional Approval for Shell’s Chukchi Sea Exploration Plan (USA)

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The Bureau of Ocean Energy Management (BOEM) on Friday, October 16, issued conditional approval of Shell Gulf of Mexico, Inc.’s revised Exploration Plan under leases in the Chukchi Sea Planning Area. In its Exploration Plan, Shell proposes drilling up to six exploration wells in Alaska’s Chukchi Sea beginning in the 2012 drilling season.

This decision follows the bureau’s completion of a site-specific Environmental Assessment that examined the potential environmental effects of the plan. The conditions of approval require Shell to comply with a range of important safety and environmental protection measures.

BOEM’s conditional approval does not authorize Shell to commence exploratory drilling in the Chukchi Sea. Shell must satisfy the conditions of BOEM’s approval, as well as obtain approvals from the Bureau of Safety and Environmental Enforcement (BSEE) regarding its Oil Spill Response Plan and well-specific applications for permit to drill.

“Our scientists and subject matter experts have carefully scrutinized Shell’s proposed activities,” said BOEM Director Tommy P. Beaudreau. “We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed on its Exploration Plan and all other applicable safety, environmental protection and emergency response standards.”

Shell acquired its leases in the Chukchi Sea in 2008 under Lease Sale 193, which BOEM recently reaffirmed after completing a Supplemental Environmental Impact Statement. All of these leases are subject to a series of stipulated requirements to mitigate operational and environmental risks, and the conditions for approval of Shell’s Exploration Plan build on and expand those requirements.

Among the conditions of approval is a measure designed to mitigate the risk of an end-of-season oil spill by requiring Shell to leave sufficient time to implement cap and containment operations as well as significant clean-up before the onset of sea ice, in the event of a loss of well control. Given current technology and weather forecasting capabilities, Shell must cease drilling into zones capable of flowing liquid hydrocarbons 38 days before the first-date of ice encroachment over the drill site. Based on a 5-year analysis of historic weather patterns, BOEM anticipates November 1 as the earliest anticipated date of ice encroachment. The 38-day period would also provide a window for the drilling of a relief well, should one be required.

Shell must also obtain necessary permits from other agencies — the Environmental Protection Agency, the U.S. Fish & Wildlife Service, and the National Marine Fisheries Service.

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Venezuela: Repsol, Eni Await Approval for Gas Extraction from Cardon IV

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Italy’s ENI  and Spain’s Repsol are waiting for Venezuela to approve the extraction of gas from a field that has the biggest deposits found so far off the OPEC nation, sources close to the project told Reuters.

South America’s biggest oil exporter is focused on developing its fledgling natural gas industry to generate power and help address electricity shortages that triggered power rationing across the country last year.

Amid delays and setbacks to other offshore development plans, ENI and Repsol completed their exploratory phase at the Cardon 4 block last year with the certification of more than 15 trillion cubic feet (tcf).  The government says it has the ability to produce 2,500 million cubic feet per day, almost as much gas as the domestic market in Venezuela consumes.

“We’re still not at the infrastructure stage,” a source at one of the companies told Reuters.

“We have agreed the tariff and we are negotiating with (state oil company) PDVSA about what component of it will be in bolivars and how much will be in dollars while we wait for the declaration that the project is commercial.” Venezuela’s currency complexities — including strict exchange controls, restricted access to hard currency and a tiered rate for converting local bolivars — provide headaches for most foreign companies operating in the country. Once the government has declared the project commercial, the two companies will partner with PDVSA to exploit the block with investments estimated at more than $4.5 billion.

Another source close to the talks said the tariff was higher than $3 per million British Thermic Units, which is close to the international price. The project’s profitability will depend on how much is paid in local  currency. “We are happy with the tariff,” said the first source. “Now we are just missing the agreement on how it will be paid.” The source added foreign companies operating in Venezuela were wary after a senior  PDVSA official said last week that the government was freezing its liquefied natural gas projects because the gas was needed domestically, and low prices did not support the cost involved.

Cardon 4 includes the promising Perla field, which would be the first offshore area to be exploited in Venezuela. Early production from the project is estimated to be 80 million cubic feet per day and to begin in  October 2012.

The country sits on some of the world’s largest gas reserves, which the government says amount to more than 195 tcf. But it has yet to begin producing any commercial gas and instead imports supplies from  Colombia.

By Marianna Parraga (Reuters)

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