CMS Plans to Expand LNG Terminal Deliverability
Ending a record year for LNG imports, CMS Trunkline LNG Co.
announced plans for a possible deliverability expansion at its LNG
import terminal in Lake Charles, LA. The company is conducting an
open season to offer firm, long-term LNG terminal services starting
in January 2002.
"The outcome of this open season will help CMS Trunkline LNG
plan for the future use and potential expansion of its LNG terminal
in Lake Charles, LA. This terminal will be an important contributor
in helping to satisfy the growing natural gas demand in the U.S.
market," said Christopher A. Helms, president of CMS Panhandle Pipe
Line Companies. Helms said the open season would determine the size
of the expansion but he noted that the company would like to add
300 MMcf/d of deliverability, bringing the facilities total
delivery capacity to 1 Bcf/d, which is equal to the capacity of
downstream pipeline partner Trunkline Gas.
In contrast to the tight economics of the past, record high
domestic gas prices have preserved favorable economics for LNG
imports for years to come. Helms said overseas LNG producers likely
would get $5/MMBtu netbacks in the current U.S. market.
"The LNG is priced at the Henry Hub price and is sold by any one
of the eight shippers that have used the terminal," said Helms.
"Today about 60% of the LNG has gone up Trunkline's longhaul
pipeline so that means 40% of what has come through the terminal
has gone into [Louisiana pipeline grid] and probably to the
Northeast [Florida or Texas]." Maximum rates for CMS Trunkline LNG
service are about $1.20/MMBtu and transportation rates to the Henry
Hub via Trunkline range between 7 and 12 cents, said Helms.
"A number of the people we are talking to include importers,
marketing companies and producers who are developing LNG projects.
As these producers are looking at bringing new LNG projects on line
in 2002, 2003 or 2005, they want to be assured that they have an
outlet to the North American market and we are to the point right
now where demand will soon exceed deliverability."
CMS is not alone in the LNG boom in the United States this year.
There has been a frenzy of activity in the relatively small U.S.
LNG sector, including plans to recommission two mothballed
terminals: Cove Point LNG in Maryland and Southern LNG's terminal
at Elba Island, GA. In addition, Columbia Gas sold its ownership
stake in the Cove Point facility to Williams, and Cabot LNG sold
its LNG facility in Boston --- the only other active import
terminal besides CMS's Lake Charles facility --- to Belgium's
The CMS LNG facility has an existing capacity to receive 90 ship
cargoes per year at 2.8 Bcf of gas per ship on average, and is
expected to receive a record 55 ship cargoes with a total of 135
Bcf of gas by year-end.
The open season for the expansion extends from Dec. 15 through
Feb. 15. Requests for service should have a minimum length of 10
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