If Houston-based LNG Central has its way, not all of the liquefied natural gas (LNG) output of Cheniere Energy’s Sabine Pass liquefaction and export project on the Gulf Coast will be shipped overseas. Some will be used to fuel the domestic marine market as well as transportation on land and the high-horsepower engine market.

LNG Central has launched its LNG America Initiative to develop infrastructure to serve domestic markets, primarily the large vessel marine market, with LNG. LNG Central is forming a new company to own and operate the logistics infrastructure needed to deliver the LNG, and it has signed a letter of intent with Cheniere to arrange LNG supply for the initiative and become an investor in the new company.

“Through our LNG America Initiative, we will develop the infrastructure and logistics needed to become a major new provider of LNG to domestic markets,” said Keith Meyer, CEO of LNG Central. “Using America’s abundant natural gas supply to fuel American engines is just good business. Cheniere’s interest in our LNG America Initiative represents a key building block in the development of our platform and the securing of LNG supply…”

The initial supply will come from the first train of Sabine Pass once it is online (see Daily GPI, March 26), Meyer told NGI. He said the project could ramp up to handling 100,000-500,000 gallons of LNG per day by around 2017. By 2020, he said, he would like to be moving about one million gallons per day.

With Sabine Pass as the supply source, the market starting point is the Gulf Coast region all the way to the east coast of Florida, Meyer said. “That’s sort of the initial focus,” he said. “If you look at moving LNG by truck as well, you can picture a ring going out from that Louisiana area reaching some of the interior as well.”

The main focus initially will be the marine market as one large marine vessel can equal the LNG demand of about 1,000 trucks, Meyer said. Driving demand in the marine market will be the fact that large diesel-fueled vessels will be subject to stricter emissions rules under the Environmental Protection Agency beginning in 2015, he said.

“So that means the marine segment has a lot of pressure to clean up the stack,” Meyer said, adding that can be accomplished by switching to “somewhat expensive” very low sulfur diesel fuel, or switching to cheaper natural gas via LNG.

Most of the marine demand for LNG has yet to materialize, Meyer said, but a number of companies have taken steps forward. One of them is Princeton, NJ-base TOTE Inc., whose LNG-fueled container ships were recently awarded the 2013 “Next Generation Shipping” award by global maritime industry forum Nor-Shipping.

TOTE was honored for its Marlin Class LNG-powered container ships, ordered from ship builder General Dynamics NASSCO in December 2012. Once completed in 2015, the 764-foot ships will operate under the Jones Act between Jacksonville, FL, and San Juan, Puerto Rico. The Marlin Class is expected to be the world’s first LNG-powered container ship. Construction is expected to begin in March.

Another company, Harvey Gulf International Marine, just announced plans to spend $400 million to build and operate an offshore LNG fueling site at Port Fourchon, Louisiana’s southernmost port. The company plans to build two facilities, each with capability to store 270,000 gallons of LNG and to transfer 500 gallons per minute. The first is expected to be finished in February with completion of the second following shortly.

“This industry, using LNG for marine fuel, is brand new, so it’s got a significant growth trajectory,” Meyer said, “but at the same time it needs all the help it can get.”

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