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Cheniere Gets Green Light to Begin Construction on Sabine Pass LNG Terminal

Cheniere Energy said Thursday that FERC has given its wholly-owned limited partnership, Sabine Pass LNG LP (Sabine), clearance to begin construction on what will be the largest liquefied natural gas (LNG) import terminal in North America when it begins commercial operations in 2008.

The Federal Energy Regulatory Commission's green light came less than three months after Cheniere was granted a certificate for the project.

The $700 million Sabine Pass terminal in Cameron Parish, LA, will have a sendout capacity of 2.6 Bcf/d, with storage space for 480,000 cubic meters of LNG. Bechtel Corp. already had started off-site preparatory work for the project under its engineering and construction agreement with Sabine Pass. With issuance of the FERC authorization, crews will now move on to the site to begin construction.

ChevronTexaco has signed a 20-year agreement for 700 MMcf/d of the capacity. The agreement includes an option to reduce or expand the capacity under the agreement to 500 MMcf/d or 1 Bcf/d, respectively. France's Total has signed a 20-year agreement for 1 Bcf/d starting in 2009. Cheniere will retain the balance of the capacity.

The project includes a $350 million, 16-mile, 42-inch diameter pipeline that will carry up to 2.7 Bcf/d of gas from the terminal at the Texas-Louisiana border to interconnections with other pipelines in southwestern Louisiana.

Sabine Pass is just the tip of the iceberg when it comes to new LNG terminals. It is one of three proposed terminals with FERC certificates. The others include Freeport LNG and Sempra Energy's Cameron LNG. The Commission also has issued certificates to two pipelines that will transport regasified LNG from terminals in the Bahamas, and to several expansion projects at three of the four existing terminals.

Meanwhile, the Department of Transportation's Maritime Administration has issued permits to three offshore LNG ports in the Gulf of Mexico: Excelerate's Gulf Gateways Energy Bridge, which is scheduled this month to become the first new terminal to begin operating in the United States in 25 years; Shell's Gulf Landing terminal; and ChevronTexaco's Port Pelican project. In addition, Canada has approved one LNG terminal, Irving Oil's Canaport facility, and Mexico has approved two, one in Baja California Norte on the Pacific Coast and another in Altamira on the Gulf Coast. For details go to http://intelligencepress.com/features/lng/.

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