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Gulf LNG Files at FERC to Add Export Capability in Mississippi

Affiliates of Kinder Morgan Inc. (KMI) filed at FERC for approval to add natural gas liquefaction and export facilities to an existing liquefied natural gas (LNG) import terminal in Jackson County, MS.

Gulf LNG Liquefaction Co. LLC (GLLC) Gulf LNG Energy LLC (GLE) and Gulf LNG Pipeline LLC (GLP) told the Federal Energy Regulatory Commission the terminal would be bidirectional once their project is completed [CP15-521]. The project entered the Commission's prefiling process last month (see Daily GPIMay 21).

The project would consist of two LNG trains with each train expected to have capacity of about 5 million tonnes per annum (mtpa). GLLC said it expects that, once in operation, the liquefaction capacity could exceed the total base level of 10 mtpa by more than 10%.

Piping modifications would be necessary at the existing Transco/Florida Gas Transmission (FGT) interconnect to permit bidirectional gas flow. Transco, as operator of the Transco/FGT interconnect, would modify the jointly owned existing facilities.

The GLP pipeline is an existing facility that would be modified to be bidirectional. The modifications would not change flow capacity, the companies told FERC.

The companies told FERC the project "...is possible because of the expected increase in domestic natural gas production in the U.S. The improved outlook for domestic natural gas production is primarily due to drilling productivity gains that have enabled growth in supplies from both conventional and unconventional sources in the U.S. Improvements in drilling and extraction technologies and efficiencies, combined with an expansion of the industry's understanding of the unconventional resource base and sharing best practices for responsible resource development, have practically eliminated concerns of declining future domestic natural gas production."

The existing terminal is part of the Port of Pascagoula and entered service in October 2011.

GLLC, GLE, and GLP are each owned by Gulf LNG Holdings Group LLC, a Delaware limited liability company which is owned 50% by Southern Gulf LNG Co. LLC, a subsidiary of KMI and operator of the Gulf LNG Terminal, and 30% by Thunderbird LNG LLC. Thunderbird is a subsidiary of Thunderbird Resources Equity LLC, which is owned by GSO Capital Partners and Chatham Asset Management. GSO is owned by The Blackstone Group LP. The remaining 20% is owned by subsidiaries of Arc Logistics Partners LP and Lightfoot Capital Partners LP.

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