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Freeport LNG Given OK to Globally Export More Gas

The Freeport LNG Terminal on Quintana Island, TX, was given a conditional green light on Friday by the U.S. Department of Energy (DOE) for an expansion to carry additional volumes of liquefied natural gas (LNG) to countries without U.S. free-trade agreements (FTA).

"The Freeport expansion application was next in the order of precedence after the Energy Department conditionally authorized Dominion's proposed Cove Point facility" in September, DOE said (see Daily GPI, Sept. 12). Cove Point was the fourth authorization of exports for non-FTA countries and brought the total to 6.37 Bcf/d.

Freeport in May was given approval to export up to 1.4 Bcf/d for 20 years to non-FTA countries (see Daily GPI, May 20). DOE's latest approval allows Freeport to export up to 1.8 Bcf/d, or 0.4 Bcf/d more.

The Freeport project approval is conditional and remains subject to an environmental review and final regulatory approval. DOE said it considered the economic, energy security and environmental impacts, as well as public comments for and against the application.

Sen. Ron Wyden (D-OR), who chairs the Energy and Natural Resources committee, said DOE "has now conditionally approved liquefied natural gas exports that are far above what was considered possible just a few years ago.

"The agency must clearly demonstrate with each approval that it is using the most recent data about U.S. natural gas demand and production. It is imperative these potential exports not have a significant impact on domestic prices for families and manufacturers, and in turn harm America's energy security, growth and employment."

Wyden’s counterpart on the committee, Sen. Lisa Murkowski (R-AK), said Friday’s approval “represents a willingness by DOE to continue to process export applications in a timely fashion. Our nation has an historic opportunity to join a developing global gas trade, but we face a narrowing window.

“There are LNG export projects under construction around the world that are competing for market share with American gas supplies. The administration cannot drag its feet on export decisions or we may miss this opportunity for America’s natural gas to play a major role in the growing global market.”

Gas supplies, Murkowski said, already are “boosting the U.S. economy, creating jobs and lowering our deficits across the board. While I welcome the decision, this approval refers to a relatively simple expansion of capacity at a facility that has already received authorization to export.”

 Wyden said he was encouraged by DOE's decision to expand LNG exports "in a deliberative manner, and consider these applications on a case-by-case basis.

"It is also heartening that natural gas prices have remained stable in response to the conditional approvals to date. Should that change or should new information become available, it would be necessary and appropriate for DOE to re-evaluate its decision making process and the data being used to inform it."

Bill Cooper, president of the Center for Liquefied Natural Gas, called the expansion approval “welcome news,” and he urged DOE to OK the remaining global gas export applications.

DOE officials said they would continue to process the applications currently pending "on a case-by-case basis, in the order of precedence previously detailed." Market developments and their impact would continue to be assessed in subsequent public interest determinations.

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