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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.

LNG EXPORT: U.S. Gas Exports Put on Back Burner

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By TENNILLE TRACY

The Obama administration is telling Japan and other allied countries they will have to wait before moving forward on plans to buy American natural gas, people involved in the talks said.

A dramatic increase in U.S. natural-gas production has led several U.S. companies, including Sempra Energy SRE +0.23% and Dominion Resources Inc., D +0.15% to seek permits from the Department of Energy to export gas to countries that lack free-trade agreements with the U.S. Exxon Mobil Corp. XOM -0.73% Chief Executive Rex Tillerson said Wednesday his company was looking at exporting from the U.S. Gulf Coast and Canada.

Sempra and Dominion are working with Japanese partners that want to import the gas as their country looks for new power sources. The U.S. currently exports relatively small amounts of natural gas via pipelines to Canada and Mexico, but a wave of recent export proposals marks the first time in decades that companies have sought to liquefy U.S. gas and transport it overseas.

But exports have become a hot-button topic for some lawmakers in Washington and have highlighted uncertainty about what kind of energy power the U.S. wants to become as companies unearth huge supplies of natural gas in shale rock.

“We are going to have to answer some basic questions about our role as a producer,” Michael Levi, a senior fellow at the Council on Foreign Relations, said. “The fact that some of these debates have been so difficult stems from their novelty.”

Japan’s prime minister raised the gas-export issue with President Barack Obama at an April 30 meeting, one of several occasions on which Tokyo has pushed the administration.

But the U.S. has told Japan, a leading military ally in the Pacific, it will have to wait, in large part because of the political sensitivities, participants in the talks said.

“I think it’s going to require more people taking a look at it,” an administration official said, adding, “We’re very sympathetic to Japan. They’re in a very difficult situation.”

Following the disaster at its Fukushima Daiichi nuclear plant last year, Japan pulled the plug on all of its nuclear reactors, forcing it to replace a power source that generated about 30% of its electricity. The government is studying whether to restart some of the reactors, but nuclear power is likely to play a smaller role in five or 10 years.

That is when the U.S. natural gas could start arriving, but only if the U.S. grants permits to export terminals that would liquefy the gas for shipping across the Pacific.

Japan isn’t the only country waiting. “The requests come from everywhere,” the administration official said. Natural gas is much cheaper in the U.S. than in Europe and Asia, where the fuel’s value is often tied to the price of oil. Companies importing American gas would be able to reduce costs with contracts tied to the lower U.S. prices.

Mr. Tillerson laid out the case for exports at Exxon’s shareholder meeting Wednesday, saying they would create jobs and help the U.S. trade balance. Sen. Lisa Murkowksi, a Republican from Alaska, asked President Obama in April to expedite permits for natural-gas exports. She said exports could give Alaska a market for gas from its North Slope, which lacks a gas pipeline to the lower 48 states.

Opponents, including Rep. Ed Markey of Massachusetts and some other congressional Democrats, say the U.S. could boost its energy security by keeping its natural gas at home. Oil-and-gas entrepreneur T. Boone Pickens, in an interview, objected to the idea of selling the gas at a discount to global prices. “You’re kind of giving your own stuff away, and it’s stupid to do that,” said Mr. Pickens, who wants U.S. trucks to use natural gas.

Japanese officials said they recognized the Obama administration’s political challenges.

“It is difficult for the U.S. to say yes [to exports] because of the presidential election,” said Hirohide Hirai, director of the petroleum and natural-gas division of Japan’s economy ministry. “There won’t be any deal with any country before November.”

U.S. officials say they are weighing how exports would affect job creation, trade and the domestic price of natural gas. A price spike would hurt consumers and weaken a competitive advantage enjoyed by U.S. manufacturers that use natural gas as a raw material. An Energy Department assessment is due later this year, and an administration official said decisions will follow in a “timely manner.”

—Mitsuru Obe and Isabel Ordonez contributed to this article.

Write to Tennille Tracy at tennille.tracy@dowjones.com

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Occidental unit to buy ex-naval station in Texas

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Posted on May 9, 2012 at 9:28 am by Associated Press

CORPUS CHRISTI, Texas — A unit of oil producer Occidental Petroleum Corp. has reached an $82 million deal to buy the South Texas site of former Naval Station Ingleside.

Port of Corpus Christi commissioners on Tuesday approved a contract with Oxy Ingleside Property Holdings for 815 acres.

The Corpus Christi Caller-Times reports Oxy has about 90 days to close the sale.

Spokesman Mark Evans says Oxy filed a permit application last week with Texas environmental regulators to build a fractionator at a nearby Oxy Chemicals unit. The new property would be used to help support the chemical plant’s natural gas operations and exports.

Houston-based Canyon Supply and Logistics earlier this year failed to make a $19 million down payment for 187 acres of the former naval facility, which closed in 2010.

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Exxon, Conoco and BP Plan Alaska LNG Exports

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ExxonMobil, ConocoPhillips, BP and TransCanada, through its participation in the Alaska Pipeline Project, announced that they are working together on the next generation of resource development in Alaska.

The four companies have agreed on a work plan aimed at commercializing North Slope natural gas resources within an Alaska Gasline Inducement Act (AGIA) framework. Because of a rapidly evolving global market, large-scale liquefied natural gas (LNG) exports from south-central Alaska will be assessed as an alternative to a natural gas pipeline through Alberta.

Commercializing Alaska natural gas resources will not be easy. There are many challenges and issues that must be resolved, and we cannot do it alone. Unprecedented commitments of capital for gas development will require competitive and stable fiscal terms with the State of Alaska first be established,” the CEOs of ExxonMobil, ConocoPhillips and BP wrote in a joint letter to Governor Sean Parnell.

The producing companies support meaningful Alaska tax reform, such as the legislation introduced by Governor Parnell, which will encourage increased investment and establish an economic foundation for further commercialization of North Slope resources.

With Point Thomson legal issues now settled, the producers are moving forward with the initial development phase of the Point Thomson project. Alaska’s North Slope holds more than 35 trillion cubic feet of discovered natural gas, and Point Thomson is a strategic investment to position Alaska gas commercialization.

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USA: Gulf Coast Applies for LNG Export

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Gulf Coast LNG Exports, LLC applied for approval from the Department of Energy (DOE) Office of Fossil Energy, to grant a long-term, multi-contract authorization for Gulf Coast to export up to the equivalent of 2.8 billion cubic feet per day (Bcf/d), or 1022 billion cubic feet per year (Bcf/y) of LNG.

Authorization is sought for a 25- year period, to commence on the date of first export or 8 years from the date of issuance of the authorization.

Gulf Coast proposes to export LNG from a natural gas liquefaction facility and LNG export terminal located at the Port of Brownsville in Brownsville, Texas to any country which has or in the future develops the capacity to import LNG via ocean-going carrier, and with which trade is not prohibited by U.S. law or policy.

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