Department of Energy Approves Third LNG Export Facility

Department of Energy Approves Third LNG Export Facility

On Wednesday, August 7, the Department of Energy approved the United States’ third liquefied natural gas (LNG) terminal. The three now approved projects will have the combined ability to export about 5.6 billion cubic feet of gas a day.

The latest approval, an export terminal in Lake Charles, Louisiana, plans to ship 2 billion cubic feet a day. The approval lasts 20 years and allows sales to all countries. The Federal Energy Regulatory Commission (FERC) still has to grant a construction permit and is contingent upon a review of detailed plans.

The first export project to win approval was Cheniere Energy’s Sabine Pass Liquefaction facility in 2011. The terminal was designed for up to six LNG trains, and is currently entered into four 20-year agreements with various customers. Please see below for detailed contract information:

More than a dozen export proposals are pending before the Department of Energy. While demand for natural gas is strong, analysts are predicting that a limited amount of buyers remain.  The facilities also cost multiple billions of dollars to build. Taking all of this into consideration, Moody’s Investor Services predict only four export projects are predicted to be built.

The debate on what effect the export facilities will have on domestic prices still remains. Some believe the benefit for the US economy outweighs the fact prices may rise.

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/ Energy Buzz, National, Texas

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