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FERC OKs Third LNG Terminal Involving Cheniere, Expanded Cameron Berthing Capacity

FERC last Wednesday awarded Cheniere Energy affiliates authorization to build a 2.6 Bcf/d liquefied natural gas (LNG) import terminal and associated pipeline facilities in Corpus Christi, TX. It also approved an amendment to Sempra's Cameron LNG certificate to expand its berthing facilities in Louisiana to handle the next generation of larger LNG tankers.

This marks the third LNG terminal involving Cheniere that the Federal Energy Regulatory Commission has approved along the Gulf Coast. In December 2004, FERC granted a certificate to Cheniere for the development and operation of the $750 million, 2.6 Bcf/d Sabine Pass LNG terminal in Cameron Parish (see NGI, Dec. 20, 2004). Prior to that, the agency approved the proposed Freeport LNG terminal in Brazoria County, TX, of which Cheniere is a 30% limited partner (see NGI, June 28, 2004).

Corpus Christi LNG LP, a partnership between Cheniere Energy and BPU LLC (an affiliate of Sherwin Alumina), will build the Corpus Christi LNG import terminal adjacent to the Sherwin Alumina plant on the northern shoreline of Corpus Christi Bay. The partnership owns a 210-acre tract of land and controls 400 additional acres through permanent easements. BPU is contributing the land and certain development costs associated with the project in return for a 33.33% limited partnership interest.

Sherwin Alumina, formerly Reynolds Metals Co., has produced alumina near Corpus Christi for more than 48 years and is a large consumer of natural gas.

The proposed terminal will have the capacity to process 2.6 Bcf/d of regasified LNG and will have three LNG storage tanks, with an aggregate LNG storage capacity of 10.1 Bcf of natural gas equivalent. Cheniere Energy said it expects construction of the facility to begin later this year, with in-service targeted for late 2008 [CP04-37]

The order also grants Natural Gas Act Section 7 authorization to Cheniere Corpus Christi Pipeline, which would provide takeaway capacity from the terminal. The pipe system would consist of 23 miles of 48-inch diameter facilities, with eight interconnects to existing intrastate and interstate pipelines: Texas Eastern Transmission, Gulf South Pipeline, Channel Pipeline, Florida Gas Transmission, Kinder Morgan Texas Pipeline, Transcontinental Gas Pipe Line, Natural Gas Pipeline Co. of America and Tennessee Gas Pipeline [CP04-44]. The facilities also would involve the construction of three 30-inch diameter lateral pipelines, totaling 0.8 mile.

FERC approved Sempra's $700 million Cameron LNG facility in Cameron, LA, in September 2003 (see NGI, Sept. 15, 2003). The project, which is under construction, will include three LNG storage tanks each capable of holding one million barrels of LNG, or about 3.5 Bcf of gas. The project also includes a 35-mile, 36-inch diameter pipeline that will extend from the terminal to an interconnection with Transcontinental in Beauregard Parish, LA. The terminal will have a sendout of 1.5 Bcf/d.

In last week's order, the Commission gave Cameron LNG the green light to modify its berthing facilities in order to allow LNG tankers up to 250,000 cubic meters in size to use its LNG terminal [CP02-378-002].

In other action last week, the pipeline and storage unit at Sempra Energy began an open season to solicit market interest in capacity on the proposed Cameron Interstate Pipeline that is being built for LNG and storage facilities in Louisiana. Nonbinding requests for service should be submitted no later than May 2, Sempra Pipelines & Storage said. Results will be evaluated and potential shippers contacted by May 18.

The 35-mile pipeline, although authorized to deliver 1.5 million Dth/d, is capable of delivering 1.8 Bcf/d. "The project permit may be modified to accommodate more capacity, depending on the results of the open season," a Sempra spokesperson said.

George Liparidis, president of the Sempra pipeline-storage unit, estimated that 5 Bcf/d of interstate and intrastate pipeline capacity will be available in the vicinity of Transco's Compressor Station 45. The pipeline also will connect with Sempra's 17 Bcf Liberty Gas Storage project and its Port Arthur Pipeline, which could extend to the Columbia Gas mainline, he said, crossing with pipelines that collectively represent another 5 Bcf/d of interconnection capacity.

Potential shippers interested in the open season should contact Sempra's Laurie Fitzmaurice at (619) 696-2698 or at www.cameronpipeline.com.

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