LNG Terminals

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As of 2012, the United States is the world's largest gas producer, recently surpassing Russia. U.S. gas producers are pressing the U.S. government to give the green light for LNG exports to Asia and Europe, to access growing markets for natural gas at higher prices.[1]

Gas is typically shipped via pipeline, but is impractical for reaching markets outside North America. LNG terminals super-chill gas to its liquid form and load it under extreme pressure into specially designed tankers for shipment overseas. Once at its destination, LNG must be re-gasified before it can be fed into pipelines for local distribution. The whole process can add up to multi-billion dollar projects.[2]

By 2012, thirteen companies in the U.S. had filed applications with the Energy Department to export more than 17 billion cubic feet of natural gas per day,[3] a number that increased to 15 companies in 2013. If all 15 company proposals were approved, they could export the equivalent of more than a third of U.S. domestically consumed natural gas.[4] Large Asian economies such as India, Japan, South Korea, and China are signing long-term contracts for gas imports.[1]

Global export terminals

Global LNG imports increased 9.4 percent from 2010 to 2011, to 240.8 million tons.[5] Imports to the European Union are projected by industry analysts to grow 74 percent by 2035 as Italy, Poland, and Lithuania build terminals to receive tankers carrying gas in liquefied form.[6]

According to LNG tracking groups in 2012, there are 10 LNG export projects in Australia, one in Canada (where several groups are reportedly considering other investments), two in Indonesia, and others in Libya, Nigeria, Papua New Guinea, and Qatar. Major new gas finds off the coast of West Africa and in South America suggest other new exporters in the pipeline. Thirty-one percent of global LNG exports in 2011 were supplied from Qatar; Asia accounted for 63 percent of global buying.[7]

Companies include Exxon Mobil and Chevron, which are building liquefaction plants and LNG export terminals along the coasts of Australia, Papua New Guinea, and Qatar. Royal Dutch Shell PLC is also investing big in plants that turn gas reserves into petrochemical products for export.[1]

Canada

A dozen export facilities have been proposed along the B.C. coast, from Howe Sound to Prince Rupert. The Vancouver Sun believes it likely that three or four will proceed to construction. Canada is looking to export to countries beyond the U.S., where demand for imported gas has dropped.[8]

In May 2012, EOG Resources, Apache, and EnCana Corporation announced a plan to begin shipping liquefied natural gas from Kitimat, British Columbia, in 2016.[9]

In July 2012, Royal Dutch Shell plc and its three partners Korea Gas, Mitsubishi, and PetroChina applied to export up to 24-million tonnes per year of natural gas (a quarter of Canada's output in 2011) for 25 years from the British Columbia coast to Japan, China, and other markets. The export terminal is slated for Kitimat, B.C. -- separate from another terminal being built by Apache. Shell has declined to estimate the cost of the terminal, but TransCanada has pegged it at $12-billion, plus a $4-billion pipeline.[10]

China

Click here for a 2012 list of LNG terminals planned or operating in China, according to data released by the government, China’s three state oil companies, and reports by media.

Proposed U.S. export terminals

The U.S. has several LNG receiving and storage facilities but none of the liquefaction equipment required to prepare natural gas for export. Many proposed U.S. export terminals are at existing gas import terminals.[2] By December 2011, six existing LNG import facilities were seeking export licenses.[11]

The Obama administration has said it supports in principle US exports of liquefied natural gas, though specific new guidelines on exports await completion of a study by the Department of Energy. The DOE is required by law to quickly approve LNG export applications to countries with which the US has free-trade agreements, which constitute the bulk of the pending requests. But the DOE is delaying decisions on LNG exports to non-FTA countries -- including China -- until it completes two studies on the domestic impacts of the exports.[12] The DOE believes the reports will be completed in 2013.[13]

Cameron LNG

Cameron LNG is a wholly owned subsidiary of Sempra Energy (SRE), a California-based natural gas distribution and marketing company. It is a liquefied natural gas (LNG) receipt terminal 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. Construction at Cameron LNG started in August 2005 and commercial operations began in July 2008.[14]

On January 17, 2012, the U.S. Department of Energy authorized Cameron LNG to export liquefied natural gas. The permit allows Cameron to ship up to 1.7 billion cubic feet a day of LNG to countries possessing free-trade agreements with the U.S. The permit is valid for 20 years after the first export shipment.[15]

In February 2014 the DOE allowed Cameron LNG to export gas to countries that do not have a free-trade agreement with the United States.[16]

Corpus Christi LNG

Corpus Christi LNG was originally planned as an LNG Import Terminal and 23 miles of 48-inch pipeline, approved by FERC in April 2005.[17]

On December 16, 2011, Cheniere Energy, Inc. announced that its wholly owned subsidiary, Corpus Christi Liquefaction, LLC, was developing an LNG export terminal at the site, which was previously permitted for a regasification terminal. The LNG export terminal site is located on the La Quinta Channel in San Patricio County, Texas, and it is anticipated that the terminal would be primarily supplied by reserves from the Eagle Ford Shale, located approximately sixty miles northwest of Corpus Christi, Texas. The proposed liquefaction project (Corpus Christi Project) is being designed for up to 13.5 million tonnes per annum (mtpa). Cheniere has initiated FERC's National Environmental Policy Act (NEPA) pre-filing review. The company plans for the first "trains," or facilities where gas will be liquefied, to be in operation in 2018.[18]

On March 25, 2013, UK energy company Centrica agreed to pay £10bn (US $15bn) over 20 years for 89bn cubic feet of gas annually from Cheniere. The first deliveries, by tanker, are expected in 2018.[19]

Cove Point LNG

Dominion Cove Point LNG is located on the Chesapeake Bay in Lusby, Maryland, south of Baltimore. It is one of the nation's largest liquefied natural gas (LNG) import facilities. Dominion acquired Cove Point from energy infrastructure company Williams on September 5, 2002, and began receiving shipments in the summer of 2003. In 2009, Dominion finished an expansion project that increased Cove Point's storage and production capacity by nearly 80 percent.[20]

Dominion Cove Point received authorization on October 7, 2011, from the Department of Energy to enter into contracts to export liquefied natural gas. Under the authorization, Dominion is permitted to enter into multi-year contracts for up to 25 years with companies wishing to export natural gas to countries with free trade agreements. The authorization is for up to 1 billion cubic feet per day. Dominion would have to add liquefaction equipment at its Cove Point facility to convert natural gas into liquefied natural gas.[20]

The Sierra Club challenged the DOE authorization. SC and Maryland Conservation Council challenged construction of the Cove Point LNG import terminal, and SC said their 1972 settlement with then owner Columbia Gas System Inc. bound Columbia and any future terminal owners to LNG imports -- not exports -- for use of the land, and requires the approval of the environmental groups for any expansions.[21]

On Sep. 11, 2013, the DOE determined "that the opponents of the [Dominion Cove Point] Application have not demonstrated that the requested authorization will be inconsistent with the public interest and finds that the exports proposed in this Application are likely to yield net economic benefits to the United States." Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export at a rate of up to 0.77 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years.[22]

Freeport LNG

Freeport LNG Development, L.P. designed, built and operates the Freeport LNG receiving and regasification terminal in Freeport, Texas. ConocoPhillips has bought two-thirds of the capacity of Freeport LNG and Dow Chemical the remaining third. Construction began in 2005 and was originally planned for LNG import, but is shifting to exports.[23]

Freeport LNG filed two DOE applications, each for 511 Bcf/year, in December 2010 and 2011, and received approval from DOE to export LNG to Free Trade Agreement countries in February 2011 and 2012. In December 2010, Freeport LNG also submitted a pre-filing request with FERC to begin the environmental review of the liquefaction project.[23]

Freeport LNG intends to file its formal application pursuant to Section 3 of the Natural Gas Act (NGA) by August 2012 and will request that FERC authorize by 2013. Freeport LNG anticipates a construction schedule of approximately three to four years, beginning in early 2017.[23]

On May 17, 2013, the DOE gave the green light to Freeport LNG Expansion and FLNG Liquefaction’s proposal to send 1.4 billion cubic feet per day of natural gas overseas for 25 years, allowing export to nations that do not have a free-trade agreement with the U.S. The decision came less than 24 hours after the Senate confirmed Energy Secretary Ernest Moniz, author of a 2011 MIT report on natural gas that advocated its export.[24]

Golden Pass LNG

In October 2012, Qatar’s Golden Pass Products LLC received permission to export liquefied natural gas from the U.S. Golden Pass is 70% owned by state-run Qatar Petroleum International and 30% by ExxonMobil. The permit allows the company to export gas to nations that have free-trade agreements with the U.S. The partners will make a final decision about the proposed $10-billion export project after receiving regulatory approvals. The investment would pay for liquefaction plants with 15.6 million metric tons of annual capacity to be added to the existing Golden Pass LNG import terminal in Texas. Qatar is the world’s largest producer of LNG, and the project may become the Persian Gulf state’s first venture for selling LNG produced in another country.[25]

Jordan Cove LNG

In 2009, FERC approved the Jordan Cove LNG import terminal proposed near Coos Bay, Oregon. Environmental groups suggested import made little sense, given plans to build a natural gas pipeline delivering gas from Wyoming to Oregon. In September 2011, acknowledging little import market existed, the Jordan Cove project filed an application for an export license with the Department of Energy. Ohio Attorney General Kroger responded by asking FERC to set aside the license it gave Jordan Cove for an import facility and pipeline, saying an import-export project has the potential to harm Oregon’s environment and economy.[11]

In December 2011, the Department of Energy granted the Jordan Cove and Pacific Connector Pipeline project a license to export liquified natural gas, making Jordan Cove the first project in 40 years in which developers proposed a new pipeline and terminal primarily to export natural gas. A 230 mile pipeline would stretch from the Klamath Basin to Coos Bay, crossing hundreds of streams and rivers, protected federal forestland, and private property. Developer Jordan Cove filed a preliminary application with FERC in February 2012 seeking pre-filing status to explore the feasibility of a liquefaction export project that would be built and operated at the same site. FERC granted that status.[11]

On April 16, 2012, FERC vacated authorization of the proposed Jordan Cove LNG terminal, as well as the certificate to construct the pipeline, concluding that an export facility serves a different purpose than an import facility, and requires its own full analysis of environmental and economic impacts. Those federal approvals are now void. Jordan Cove said they are working on getting their export application ready by 2013.[26]

On March 23, 2014, the US Department of Energy conditionally approved the Jordan Cove LNG project, permitting it to export up to 0.8 billion standard cubic feet of natural gas per day for 20 years.[27]

Sabine Pass LNG

On April 16, 2012, the Federal Energy Regulatory Commission granted approval for Houston-based Cheniere Energy Partners to build the first liquefied natural gas (LNG) export terminal in the lower 48 United States. The $5 billion Sabine Pass LNG project to be located at an existing import terminal in Cameron Parish, Louisiana, along the Gulf Coast.[1]

Construction is expected to begin in 2012, with LNG exports to begin in 2015. Cheniere has signed a contract with Bechtel Oil, Gas and Chemicals Inc. to build the facilities. Cheniere said it has signed LNG supply contracts with utilities in the United Kingdom, Spain, South Korea, and India -- Cheniere has Energy Department license to ship domestic gas to nations that are not U.S. free-trade partners. U.S. gas producers will have the capacity to export up to 18 million tons of LNG annually, worth about $1.7 billion at current prices.[28]

It was FERC’s first authorization of a project of this kind, FERC said in an accompanying statement: “Today’s order finds that the project can be constructed and operated safely and with minimal environmental impacts."[28]

In its Sabine Pass order, FERC settled on the DOE's earlier findings that increased LNG exports "will result in increased production that could be used for domestic requirements if market conditions warrant such use, and this will tend to enhance U.S. domestic energy security." FERC also dismissed charges by the Sierra Club and the Gulf Coast Environmental Labor Coalition that the commission shortchanged its environmental and safety reviews, citing conditions that Cheniere comply with the federal Clean Air Act, including rules governing greenhouse gas emissions and the use of "best available" pollution control technology.[1]

After securing a $2 billion investment in a February 2012 deal with private equity firm Blackstone Group, Cheniere is searching for an additional $3 billion to $4 billion to start construction. Cheniere is working with eight financial institutions to secure the additional financing: Bank of Tokyo-Mitsubishi UFJ Ltd., Credit Agricole Corporate and Investment Bank, Credit Suisse Securities LLC, HSBC, J.P. Morgan Securities LLC, Morgan Stanley, RBC Capital Markets and SG Americas Securities LLC.[28]

Floating terminals

In December 2013 it was reported that the U.S. Department of Energy had approved EOS LNG LLC’s and Barca LNG LLC’s applications to export LNG from a proposed floating liquefaction unit and storage tanker at the Port of Brownsville, Texas to nations with a Free Trade Agreement (FTA) with the U.S.[29]

FERC list of proposed terminals in North America

This is a list of proposed LNG terminals in North America as of February 2012, according to the Federal Energy Regulatory Commission:[30]

  • Import Terminals: Proposed
  1. Robbinston, Maine: 0.5 Bcfd (Kestrel Energy - Downeast LNG)
  2. Astoria, Oregon: 1.5 Bcfd (Oregon LNG)
  3. Calais, Maine: 1.2 Bcfd (BP Consulting LLC)
  4. Corpus Christi, Texas: 0.4 Bcfd (Cheniere – Corpus Christi LNG)
  5. Offshore New Jersey: 2.4 Bcfd (Excalibur Energy – Liberty Natural)
  • Export Terminals: Proposed
  1. Sabine, Louisiana: 2.6 Bcfd (Cheniere/Sabine Pass LNG)
  2. Freeport, Texas: 1.8 Bcfd (Freeport LNG Dev/Freeport LNG Expansion/FLNG Liquefaction)
  3. Corpus Christi, Texas: 1.8 Bcfd (Cheniere – Corpus Christi LNG)
  • Proposed Canadian projects:
  1. Kitimat, British Colombia: 0.7 Bcfd (Apache Canada Ltd.)
  2. Douglas Island, British Colombia: 0.25 Bcfd (BC LNG Export Cooperative)
  • Potential U.S. sites identified by sponsors
  1. Lake Charles, Louisiana: 2.0 Bcfd (Southern Union & BG LNG)
  2. Cove Point, Maryland: 1.0 Bcfd (Dominion – Cove Point LNG)
  3. Coos Bay, Oregon: 1.2 Bcfd (Jordan Cove Energy Project)
  4. Hackberry, Louisiana: 1.7 Bcfd (Sempra – Cameron LNG)
  5. Brownsville, Texas: 2.8 Bcfd (Gulf Coast LNG Export)
  • Potential Canadian sites identified by sponsors
  1. Prince Rupert Island, British Colombia: 1.0 Bcfd (Shell Canada)

Reports

Resources

References

  1. 1.0 1.1 1.2 1.3 1.4 Joel Kirkland, "NATURAL GAS: U.S. throws open doors to LNG exports with Cheniere approval," E&E, April 17, 2012.
  2. 2.0 2.1 Steve Gelsi, "Shale gas opens door to U.S. LNG exports," Energia a Debata, April 17, 2012.
  3. Hannah Northey, "ENERGY POLICY: Wyden, Markey call on Obama to develop export policies," E&E, June 1, 2012.
  4. Clifford Krauss and Nelson Shwartz, "Foreseeing Trouble in Exporting Natural Gas," NY Times, Aug 15, 2013.
  5. Jenny Mandel, "LNG: Is a true global market in the cards for natural gas?" E&E, June 21, 2012.
  6. Katarzyna Klimasinska, "European Fracking Bans Open Market for U.S. Gas Exports," FuelFix, May 23, 2012.
  7. Jenny Mandel, "LNG: Is a true global market in the cards for natural gas?" E&E, June 21, 2012.
  8. Scott Simpson, "Fracking shakes up gas economics," Vancouver Sun, Sep 12, 2013.
  9. "Exxon Considering Natural Gas Exports," 24/7 Wall St., May 30, 2012.
  10. Nathan Vanderklippe, "Shell applies for 25-year natural gas export license," The Globe and Mail, July 27, 2012.
  11. 11.0 11.1 11.2 Amelia Templeton, "Department of Energy Gives Jordan Cove License to Export Natural Gas," OPB, Dec. 7, 2011.
  12. Jim Magill, "White House supportive of US LNG exports: aide," Platts, June 21, 2012.
  13. Jenny Mandel, "DOE delays LNG export assessment," E&E, September 18, 2012.
  14. "One of the First New Liquefied Natural Gas Receipt Terminals in North America," Cameron LNG: About Us, accessed April 2012.
  15. Ben Lefebvre, "Cameron LNG Receives Liquefied-Natural-Gas Export Permit," Dow Jones Newswires, January 20, 2012.
  16. Hannah Northey, "DOE approves 6th export application," E&E, February 11, 2014.
  17. [http://intelligencepress.com/features/lng/ "North American LNG Import Terminals Status of Proposed and Existing Facilities,"] Natural Gas Intelligence, accessed April 2012.
  18. "Cheniere plans Corpus Christi export terminal," LNG World News, Dec 16th, 2011.
  19. Fiona Harvey, "US shale gas to heat British homes within five years," guardian.co.uk, March 25, 2013.
  20. 20.0 20.1 "Dominion Cove Point LNG," Dominion Cove Point website, accessed April 2012.
  21. Ayesha Rascoe, "Sierra Club To Fight Dominion Hub Using 1972 Deal," World Environmental News, April 27, 2012.
  22. "Dominion Cove Point receives authorization to export LNG to non-free trade countries," LNG Global, Sep 11, 2013.
  23. 23.0 23.1 23.2 "Freeport: Welcome to our website," Freeport LNG Development, accessed April 2012.
  24. Zack Colman, "DOE gives green light to controversial natural gas export project," The Hill, May 17, 2013.
  25. "Qatar, Exxon venture wins first U.S. LNG export permit," Bloomberg News, Oct 4, 2012.
  26. Rob Manning, "Backers Of Proposed Natural Gas Terminal Undeterred By FERC Decision," NPR, April 17, 2012.
  27. David Unger, "US approves more LNG exports as Europe looks to curb Russian gas," CSM, March 24, 2014.
  28. 28.0 28.1 28.2 Luke Johnson, "The Federal Energy Regulatory Commission (FERC) approved on Monday Cheniere Energy’s plans to liquefy and export natural gas, clearing the way for the Houston-based company to be first US LNG exporter in decades," Upstream, April 16, 2012.
  29. "DOE Approves Two More Applications to Export LNG to FTA Nations," LNGLawBlog, Dec 2, 2013.
  30. "North American LNG Import/Export Terminals: Proposed/Potential," FERC, updated Feb. 28, 2012.

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