Freeport applies to export LNG, predicts minor US price impacts
Freeport applies to export LNG, predicts minor US price impacts
Washington (Platts)--20Dec2010/608 pm EST/2308 GMT
Exporting 1.5 Bcf/d of natural gas from Texas across the globe in the form of LNG would "result in barely perceptible price impacts" in the US, analysts said in a market study filed with Freeport LNG's export application.
Macquarie Energy and Freeport announced in November plans to build and market liquefaction capacity at an existing import terminal in southern Texas.
The developers followed up Friday with an application to the US Department of Energy requesting permission to export up to 9 million metric tons annually for 25 years.
"The United States has developed a massive natural gas resource base that is sufficient to supply domestic demand for a century, even with significant exports of LNG," Freeport said. "The liquefaction project will not adversely affect US energy security."
Altos Management Partners said in an attached market report that the economic benefits would outweigh the harm from potentially higher gas prices.
The analysts predicted the project would create 17,000 to 21,000 jobs and spur companies to spend $2.7 billion/year on salaries, and exploration and production.
The report predicted LNG exports from the Texas terminal would raise Henry Hub prices by 3 cents/MMBtu and gas at the Houston Ship Channel pricing hub by 9 cents/MMBtu. The project would draw shale gas from the Barnett, Haynesville, Eagle Ford and Marcellus basins.
"The miniscule price impacts reflect the fact that the incremental demand represented by the project is quite small, only about 2%, relative to the entire domestic market," the report said, comparing the 547 Bcf/year of exported supplies with the projected 22 Tcf/year in demand.
Making the case to DOE, the application said allowing exports would improve the US balance of trade by $3.9 billion/year, assuming average prices of $7/MMBtu over the life of the project.
Freeport added that it would significantly cut greenhouse gas emissions because countries that burn coal and fuel oil would have a new source for cleaner-burning natural gas.
Two other liquefaction developers hope to send North American gas overseas.
In August, Cheniere Energy asked DOE for permission to export up to 800 Bcf/year for 20 years from its import terminal at Sabine Pass, Louisiana. And earlier this month, Apache's Canadian affiliate asked the National Energy Board for permission to export up to 468 Bcf/year for 20 years from the proposed Kitimat terminal in Bish Cove, British Columbia.
--Meghan Gordon, meghan_gordon@platts.com
Similar stories appear in LNG Daily. See more information at http://bit.ly/LNGDaily
Views: 30
Replies to This Discussion
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Permalink Reply by Parkdota on
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I know the U.S. shipped LNG to the UK this fall. With their worst winter in 100 years I was wondering if we would be shipping some more. Also, the articles below discuss future shipments, maybe this winter shipments, and ponders if the UK will run out of natgas in storage due to their unprecedented winter?
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Permalink Reply by Les Bamburg on -
Parkdota, the LNG shipped was originally imported to the US and simply held in storage.
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Permalink Reply by adubu on
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Les B and Parkdota----If US is now begining to export NG then Why are we still importing avg 1.32 bcfd of NG from the middle east and else where into USA?????
At least this should off set the import amount of NG to USA.
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Permalink Reply by Les Bamburg on
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Adubu, we are not exporting US sourced natural gas (except from Alaska). The US actually imports 6-7 Bcfd when you include Canadian sourced pipeline volumes.
The LNG imports are averaging less than 1 Bcfd and are primarily delivered to the Distrigas Terminal in Boston as pipeline capacity is not sufficient to meet local demand. Most of those imports are sourced from Trinidad. A few other cargos are delivered to the remaining terminals for various reasons (terminal maintenance, long term contract, re-export, etc).
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Permalink Reply by sesport on
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Heads up ... incoming pirtate!!
http://www.ferc.gov/industries/gas/indus-act/lng/LNG-potential.pdf
lol and ho, ho, ho, 80)
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Permalink Reply by sesport on
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correction ... "pirate"
My edit isn't working like it used to. bummer 80P
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Permalink Reply by adubu on
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Les B--- the 1.32 bcfd quote of imports of LNG came from Natural Gas Trends report of Oct 18 th 2010 on the Texas RRC web site. It did not include that from pipeline sources from Canadian, etc
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Permalink Reply by kittycatmama on
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Les, aren't we also importing from Qatar into the port at Sabine Pass? I think I read that the last shipment arrived this past summer.
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Permalink Reply by Les Bamburg on
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KCM, yes - that is an example of LNG being imported primarily for terminal maintenance and/or later re-export to other markets. Total has 1 Bcfd of capacity at the Sabine Terminal and controls a portion of the Qatar LNG supply.
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