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Pangea Enters Gulf Coast LNG Export Fray

Pangea LNG (North America) Holdings LLC on Thursday sought liquefied natural gas (LNG) export authority for its planned facility on Corpus Christi Bay in South Texas. The company filed an application with the U.S. Department of Energy (DOE) seeking authority to export up to 8 million metric tons per year (398.5 Bcf/year) of LNG to all current and future countries with which the U.S. has a Free Trade Agreement (FTA). The authority to export would be for a 25-year term.

Pangea also plans to pursue authorization to export to non-FTA countries as well and would file long-term export contracts with DOE once they are executed. The company is finalizing talks with Statoil North America Inc. that could lead to Statoil taking up to a 50% equity stake in the project and utilizing up to half of its liquefaction and export capacity, Pangea told DOE.

South Texas LNG Export (ST LNG) would be located in Ingleside, TX, on the La Quinta Ship Channel, which is part of the Port of Corpus Christi. It would be on a portion of a 550-acre site that includes half a mile of frontage on the deepwater ship channel. Pangea has had the site under option since June; it is between property held by Kiewit Offshore Services and OxyChem. A separate pipeline project would connect the LNG plant to the interstate and intrastate natural gas transmission pipeline network in South Texas.

"We expect there to be several successful LNG export projects on the Texas Coast in the coming years because of the large new natural gas reserves in North America," said Pangea LNG CEO Kathleen Eisbrenner. "Exporting LNG will help stabilize U.S. natural gas prices, sustain drilling and production jobs in South Texas, and stimulate investment in developing additional gas reserves."

South Texas LNG could be in operation by 2018, Pangea said. A project feasibility and preliminary design process is under way and is being conducted by CB&I. The project will require federal, state and local regulatory approval. The Federal Energy Regulatory Commission is the lead agency in the site permitting process. "The ST LNG Project will consist of both land-based and floating components and will include natural gas treatment, compression, liquefaction and storage facilities, as well as secondary facilities required to receive and liquefy natural gas, and to store and deliver LNG," Pangea told DOE in its filing.

"Through an approximately 27-mile long pipeline (ST Pipeline) to be developed by a Pangea affiliate, the ST LNG Project will interconnect with many of the more than nine interstate and intrastate pipeline systems crossed by the ST Pipeline, allowing natural gas to be supplied through displacement or direct access from a wide variety of supply sources...In addition to the Eagle Ford and conventional South Texas production, which are in close proximity to the ST LNG Project, the planned ST Pipeline interconnects offer indirect access to the Marcellus, Haynesville, Woodford basins and other conventional Gulf Coast and North American production through displacement."

ST LNG project is the second LNG liquefaction project being developed by Pangea LNG companies. Levant LNG Marketing, a Pangea subsidiary, is working on engineering and commercial agreements for the Tamar Project, which would export LNG from the Tamar and Dalit fields in the Eastern Mediterranean, 60 miles offshore Israel. The facility will be a permanently moored offshore floating liquefaction vessel with onboard LNG storage. The self-contained operation would be the first floating LNG export project in the Mediterranean Basin. A final investment decision is expected by the second half of 2013.

Pangea is based in The Woodlands, TX, and is a unit of Pangea LNG B.V., a Netherlands-based company that is developing floating LNG liquefaction and storage. Pangea LNG B.V. shares are owned by Daewoo Shipbuilding & Marine Engineering (70%), D&H Solutions AS (20%) and NextDecade International Cooperatief U.A. (10%). NextDecade International is a Netherlands-based cooperative and has six individual investors from the United States, Spain and The Netherlands.

Eisbrenner is an LNG veteran. She was the chief commercial officer of El Paso Global LNG and later became president of Excelerate Energy LLC when it bought the rights to El Paso's Energy Bridge LNG technology (see NGI, Dec. 22, 2003). Excelerate has developed multiple offshore floating LNG import facilities. Eisbrenner later became executive vice president for global LNG with Shell Gas & Power International. She founded NextDecade after leaving Shell.

Multiple projects have been proposed to export domestically sourced LNG from the Gulf Coast region. Among these is Excelerate's Lavaca Bay LNG project in Port Lavaca, TX, between Galveston and Corpus Christi (see NGI, May 21).

Cheniere Energy Inc. has an export project planned for Corpus Christi (see NGI, Sept. 3). There also is the Gulf LNG import terminal in Pascagoula, MS, acquired by Kinder Morgan Inc. when it bought El Paso Corp., which plans to export LNG (see NGI, Oct. 22). Waller LNG Services LLC has a project at the entrance of the Calcasieu Ship Channel in Cameron Parish, LA (see NGI, Oct. 22). Sempra Energy has a liquefaction project at the existing Cameron LNG import terminal in Hackberry, LA (see NGI, May 7). And BG Group plc and Southern Union have a project at Lake Charles, LA (see NGI, Aug. 8). Furthest along in development on the Gulf Coast is Cheniere's Sabine Pass project (see NGI, Feb. 6).

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