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Early 2012 Groundbreaking Planned for Sabine Pass LNG Export

Cheniere Energy said Tuesday it expects to begin construction of long-discussed natural gas liquefaction and export facilities at its existing Sabine Pass import terminal in Cameron Parish, LA, early next year. The company said it will spend $6 billion to expand the facility to allow the liquefaction and export of domestic natural gas, particularly that from shale plays.

The project is claimed to be one of the largest capital investments in Louisiana history, according to Louisiana Gov. Bobby Jindal.

"The construction of Cheniere's Liquefaction Project in Cameron Parish will provide key support to Louisiana's economy and natural gas industry, which has been transformed by the development of the Haynesville Shale," said Cheniere CEO Charif Souki. "In only two years, Louisiana's natural gas production has doubled as the Haynesville has grown into one of the most prolific shale plays in the world.

"Our Liquefaction Project will provide thousands of jobs in southwest Louisiana while connecting the state's natural gas industry to global markets, making Louisiana the world's first dual importer and supplier of LNG [liquefied natural gas]. We greatly appreciate the support that Cheniere has received from the state of Louisiana and the people of Cameron Parish, who have demonstrated a strong commitment to our Sabine Pass LNG terminal."

Adding liquefaction capabilities will transform the Sabine Pass terminal into a bidirectional facility capable of exporting LNG in addition to receiving LNG for regasification. In May Cheniere Energy Partners LP unit Sabine Pass Liquefaction LLC received approval from the U.S. Department of Energy to liquefy and export U.S. gas from the Sabine Pass terminal to any country that has or develops import capacity (see Daily GPI, May 23). The order expanded upon the authorization Sabine received last September that authorized exports to all current and future Free Trade Agreement countries (see Daily GPI, Sept. 13, 2010).

In recent months Cheniere has touted talks with a number of parties that it said expressed interest in capacity in the project (see Daily GPI, Feb. 22). A Cheniere spokesperson was not immediately available Tuesday to respond to an inquiry about capacity contracts in support of the project.

The project is expected to create 148 jobs and retain 77 existing jobs, with a total compensation and benefits package that will exceed an average of $100,000 a year. Hiring of the new permanent employees is to begin in 2014. The facility is expected to commence operations in 2015. The final phase of the project is expected by the end of 2018.

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