Gov. Bobby Jindal and Maurice Brand, Magnolia LNG Managing Director and Joint Chief Executive Director, announced the company’s plans to develop a $2.2 billion natural gas liquefaction production and export facility at The Port of Lake Charles.
The LNG project would create 45 new permanent jobs, with an average salary of $75,000 per year, plus benefits. LED also estimates the project would result in 175 new indirect jobs. In addition, the LNG project would require an estimated 1,000 construction jobs.
The company expects to make a final investment decision to move forward with the project in late 2014, after it secures permits and completes financing. The mid-scale LNG facility would be located on 90 acres at the port’s Industrial Canal, off the Calcasieu Ship Channel. Magnolia LNG would produce 4 million metric tons of liquefied natural gas per year, and construction would begin in 2015 pending the company’s attainment of permits and final financing.
Gov. Jindal said, “Magnolia LNG’s decision to move forward in developing a new LNG facility is great news for our state. Magnolia is the latest company that is choosing to invest in Louisiana because we have one of the best business climates in the country and we are continuing to foster an environment where companies want to create jobs.
“We’ve fostered a strong business climate because we have overhauled our ethics laws, revamped workforce development programs, eliminated burdensome business taxes, instituted reforms to give every child an opportunity to get a great education, and now we are taking on tax reform in order to make Louisiana the best place in the world for businesses to invest and create jobs for our people. In addition to our strong business climate, Louisiana’s abundance of natural gas, pipelines and accessible waterways, as well as our outstanding workforce, were key factors in Magnolia’s decision to choose our state. Facilities like these will help create and sustain thousands of jobs in the energy industry across our state and will ensure quality jobs for Louisiana families for years to come.”
Magnolia’s project would be positioned for direct access to several existing gas pipelines. Using its patented Optimized Single Mixed Refrigerant process, or OSMR™, Magnolia LNG would produce liquefied natural gas more efficiently with fewer emissions than other LNG processes. OSMR adds conventional combined heat and power technology with industrial ammonia refrigeration to enhance the performance of the liquefaction process. Magnolia LNG would distribute to domestic markets as well as countries that have free trade agreements with the U.S. The company also will explore a potential expansion to 8 million metric tons per year in the future.
“Southwest Louisiana’s attractive infrastructure and strong workforce made Lake Charles an ideal location for our planned facility,” Brand said. “We especially want to thank the Port of Lake Charles Commission for their partnership in identifying such an ideal location for this project. Whilst the company remains focused on securing the appropriate contracts, agreements and permits, we expect to commence construction of our first U.S. venture by 2015.”
Magnolia LNG will seek federal Department of Energy free trade agreement approval in 2013. The company will submit a pre-filing application to the Federal Energy Regulatory Commission in March, before it completes the selection of project partners by June 2013. The company plans to begin hiring in early 2015, with commercial operations to begin in 2018.
“The Port of Lake Charles has been able to provide a unique combination of location, infrastructure and transportation capabilities to help bring this project to the region,” said Port Executive Director Bill Rase. “Magnolia LNG will be a significant and welcome addition to Southwest Louisiana’s energy corridor. The Port’s staff and board of commissioners look forward to doing business with the company.”
LED began working with Magnolia LNG in late 2012. The company’s proposed 90-acre site would include a long-term lease with The Port of Lake Charles. When Magnolia decides to proceed with construction, the company is anticipated to make use of LED incentive programs, such as the Quality Jobs Program and Industrial Tax Exemption Program.
“This project is another demonstration of our capacity for strengthening Southwest Louisiana and the state to become a stronger energy producer,” said President and CEO George Swift of the Southwest Louisiana Economic Development Alliance. “We are appreciative of Magnolia LNG to make this investment in our region and for the Port of Lake Charles to once again to serve as the catalyst for this project. We look forward to their final investment decision next year.”
- $2.2 Billion LNG Liquefaction Facility Announced for Port of Lake Charles (gcaptain.com)
- Bechtel wins FEED contract for Mozambique’s first LNG project (transportationandstorage.energy-business-review.com)
- South Korea: STX Launches Ultramodern LNG Carrier VELIKIY NOVGOROD (worldmaritimenews.com)
- Critics of LNG Exports Undermining Domestic, Global Strategic Benefits (fuelfix.com)
- Demand for LNG to Outstrip Supply in 2013 (247wallst.com)
Waller Marine, through its LNG development subsidiaries, Waller Energy Holdings and Waller LNG Services, has initiated activities on its first natural gas liquefaction (LNG) facility to be constructed on a 175 acre site the Company has acquired at the entrance point of the Calcasieu Ship Channel in Cameron Parish in Southwest Louisiana.
Using small-scale liquefaction technology, the Company plans to install nominal 500,000 gallon per day LNG trains in phases as the market and demand for marine LNG fuels inevitably expands. The first trains are planned for the Waller Point™ LNG terminal in Cameron Parish, and additional trains are planned for a second terminal which it is developing through its subsidiary Waller Energy Partners at a site to be secured on the Mississippi River in the first quarter of 2013. These will be the first two of the initial seven small scale LNG terminals the Company plans to install at strategic locations on each US coast.
With the looming regulatory requirement for vessel’s to comply with new ECA emission control regulations when operating in the territorial waters of the United States, the Company’s focus is to supply LNG to the marine fuels market. To enable the supply and distribution of LNG to and from small scale LNG terminals and for bunkering LNG as a marine fuel, Waller has been the first to conceive and design a series of small LNG vessels ranging from its 2,000 to 10,000 cubic meter capacity river transport and bunker barges and its 10,000 to 30,000 cubic meter coastwise ATB LNG vessels. Waller’s innovative concepts are patent pending before the USPTO, and Waller has recently acquired Approval in Principle from the American Bureau of Shipping (ABS).
US vessel owners are faced with increasing costs of operations as the ECA regulations drive decisions on how they should comply; one, by installing scrubbers in the exhausts or two, by using ultra-low sulfur fuels. A third and more cost-effective alternative that will permit compliance with emissions is the use of LNG to fuel their vessels. With strategically located LNG supply facilities, a distribution of the fuel by Waller barges to small-scale LNG storage terminals combined with ship fueling with Waller LNG bunker barges at anchorages, ports and terminals throughout the US, vessel owners will have access to competitively priced LNG. Waller anticipates that substantial savings can be achieved by vessel owners using LNG fuels with payback for conversion costs being as short as six months.
Waller has also initiated a vessel conversion strategy and is working with partners on providing funding for the conversion of ships to be fueled by LNG. Working with engine manufacturers and equipment suppliers, Waller is engineering shipboard LNG fuel storage and supply systems for vessels having a range of horsepower. They are also developing pre-manufactured systems to reduce or eliminate downtime during conversion.
Graphic source: Hot Air (click to enlarge)
For starters, what is the Strategic Petroleum Reserve (SPR)?
The SPR was created in the United States after the Arab oil embargo that occurred between 1973 and 1974. It holds over 700 million gallons of crude oil and was initially to provide crude oil during any major supply interruption to the US.
Its mandate was expanded by Congress later to include potential release to address a severe spike in oil prices. It is in effect a national security tool for a president!
There is not however any legal rationale to tap the SPR for use as a political tool, which is what a release decision by President Obama at this point in time would seem to be.
If however some incident along the lines of Iran preventing shipments through the Strait of Hormuz were to occur, that would be an entirely different story.
Forgetting for a moment about the SPR, what about the reserves that the Obama administration has refused to tap?
It is an absolute truism that any release from the SPR designed to effect a decrease in crude oil prices would be a short-lived one at best as the country currently consumes over 18 million barrels a day. The last sale out of the SPR was 30 million barrels in 2011 or less than a two-day supply!
Another even more important truism is provided by examining the graphic above.
This graphic shows that the moves made by this President, instead of lowering energy prices and boosting jobs and the economy, will instead have the effect of higher crude oil prices, less jobs and a slower economy.
It all makes one wonder, yet again, about some of the choices of this White House.
I think that it is fair to say that basically any way you slice it, for this President most if not all decisions are about politics and an administration doing whatever is necessary to try and get a 2nd-term in office.
A belief in letting the chips fall where they may as long as any political benefit may exist!
Finally, to provide some historical perspective about the use of the SPR consider:
SPR releases through time!
* June 2011 Libya war – Sold 30 million barrels.
* Sept 2005 Hurricane Katrina – Sold 11 million barrels.
* 1996-97 Nonemergency sales – Sold 28.1 million barrels (5.1 million in Weeks Island sale to pay for decommissioning of storage site and transfer of its oil; 12.8 million to reduce the federal budget deficit; 10.2 million to pay for the cost of operating the SPR).
* 1990-91 Iraqi invasion of Kuwait – Sold 21 million barrels (3.9 million in Oct 1990 test sale; 17.2 million in Jan 1991 drawdown ordered by president).
* Nov 1985 Test sale – Sold 967,000 barrels.
* Sept 2008 – Loaned 5.4 million barrels of crude to five oil companies after hurricanes Gustav and Ike cut supplies.
* Jan 2006 – Loaned 767,000 barrels of sour crude to Total Petrochemicals USA after the Sabine Neches ship channel closed and deliveries stopped to Texas refineries.
* Sept/Oct 2005 – Loaned 9.8 million barrels of sweet and sour crude after Hurricane Katrina disrupted Gulf of Mexico production and damaged terminals, pipelines and refineries.
* Sept 2004 – Loaned 5.4 million barrels of sweet crude due to disruptions in the Gulf of Mexico caused by Hurricane Ivan.
* Oct 2002 – Loaned 98,000 barrels to Shell’s Capline Pipeline to keep storage tanks full to withstand Hurricane Lili’s winds.
* Oct 2000 – Loaned 30 million barrels to boost winter heating oil supplies in the Northeast.
* Aug 2000 – Exchanged 2.8 million barrels of crude oil for 2 million barrels of heating oil to create Northeast Home Heating Oil Reserve.
* June 2000 – Loaned 500,000 barrels each to Citgo and Conoco after the Calcasieu Ship Channel closed and blocked crude oil shipments to Louisiana refineries.
* Dec 1998 to Feb 2000 – Exchanged 11 million barrels of lower-quality heavy crude in SPR with Mexico’s PEMEX for 8.5 million barrels of higher-quality sweet crude more suitable for U.S. refineries.
* April 1996 – Loaned 900,000 barrels of SPR crude to ARCO after company’s pipeline to Cushing, Oklahoma, had blockage. (Source)
- Tapping oil from the SPR may be trickier than ever (business.financialpost.com)
- A Brief History of the U.S. Strategic Petroleum Reserve [OIL LOANS, OIL SALES] (ibtimes.com)
- Is The SPR Release Already Priced Into Oil Prices? (zerohedge.com)