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Lake Charles Terminal Enhancements Will Expand LNG Import Options

Enhancements to the Trunkline liquefied natural gas (LNG) terminal at Lake Charles, LA, costing about $250 million, will expand capacity and flexibility for BG LNG Services, holder of all of the plant's capacity.

"The United States is one of our core markets and this project provides BG with the option of supplying the market from a wider variety of LNG sources, thus increasing not only long-term supply reliability for our downstream customers, but also increased flexibility for the world's LNG sellers," said Martin Houston, BG North America's managing director.

The facility upgrade, which is being constructed by Trunkline LNG, will allow the terminal to extract heavier hydrocarbons, such as butane, propane and ethane from the LNG with a new natural gas liquids extraction plant, thus allowing the terminal to source LNG with a wide range of suppliers while meeting U.S. pipeline specifications. The upgrade also includes installation of ambient air vaporization, which reduces fuel needed for regasification.

Catherine Elder, head of the fuels practice at consultancy R.W. Beck, told NGI the past winter proved that anything that can bring more Btus to the market probably is a good thing. However, she expressed concern that the Federal Energy Regulatory Commission (FERC) still has yet to address concerns over gas quality that have been raised by importation of LNG from countries where gas supplies have a high heat content. "It's a good thing to bring in richer content gas, all else being equal," she said.

The project is fully contracted to BG LNG Services, a unit of BG Group plc, under long-term agreements. Trunkline LNG and BG LNG agreed to extend the existing terminal and pipeline services agreements through 2028, representing a five-year extension. With the new agreement and facilities, BG will have firm access to 100% of capacity installed, under construction or announced up to and including 9 Bcf of storage and 2.1 Bcf/d of peaking sendout provided with either conventional or ambient air vaporizers and all of the terminal's natural gas liquids extraction capacity.

"Adding ambient air vaporization and natural gas liquids extraction capabilities will allow Trunkline LNG to maintain its position as one of the most modern and competitively priced providers of vaporization capacity in the United States and the world," said Rob Bond, Panhandle Energy COO.

Trunkline made the appropriate filings at the Federal Energy Regulatory Commission March 31. Construction will begin after regulatory approvals are received. The project is expected to enter service in 2008.

Additionally, Trunkline LNG's phase I expansion of the Lake Charles terminal entered service last week. The phase I expansion increases sendout to 1.2 Bcf/d with peak capacity of 1.5 Bcf/d. The phase I expansion also includes addition of a second ship berth and a new LNG storage tank that increases storage capacity to 9 Bcf. The phase II expansion, which includes adding unloading arms to the berth and increasing capacity to 1.8 Bcf/d with peak sendout of 2.1 Bcf/d, is under construction and expected to be completed by mid-year.

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