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Lake Charles LNG Gains Federal OK to Export More Natural Gas

Two long-term applications to export an additional 0.33 Bcf/d of liquefied natural gas (LNG) from the already approved Lake Charles LNG Liquefaction Project in Louisiana were given a green light Thursday by the Department of Energy (DOE).

The two nonadditive authorizations were issued to Lake Charles Exports LLC and Lake Charles LNG Export Co. to export gas to any country in the world not prohibited by U. S. law or policy.  The DOE previously authorized exports of up to 2 Bcf/d worldwide.

With further engineering of the planned project, additional design capacity has been realized, DOE said.

According to the Lake Charles companies, construction would provide thousands of jobs and hundreds of permanent jobs. The announcement initially was made by President Trump Thursday as he highlighted U.S. energy dominance.

To date, DOE said it has authorized a total of 21.33 Bcf/d for exports worldwide from planned facilities in Texas, Louisiana, Florida, Georgia, Maryland and the Gulf of Mexico.

Officials conducted an extensive review of the Lake Charles applications and considered the economic, energy security, and environmental impacts, including macroeconomic studies that showed positive benefits to the U.S. economy in scenarios with LNG exports up to 28 Bcf/d.  The Lake Charles project is owned jointly by Energy Transfer Partners LP (ETP) and Royal Dutch Shell plc.

Earlier on Thursday, an ETP subsidiary and Shell secured a memorandum of understanding (MOU) with South Korea’s Korea Gas Corp. (Kogas) to consider participating in the Lake Charles project. Kogas already has a 20-year sales and purchase agreement with Cheniere Energy Inc. for LNG supplies from the Sabine Pass Liquefaction facility in Louisiana.

The nonbinding MOU would allow the parties to study the project’s economics, a potential engineering, procurement and construction agreement, and the feasibility of sourcing/marketing U.S. LNG.

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