ExxonMobil Launches LNG Import Project at Sabine Pass, TX

Exxon Mobil Corp. affiliate Golden Pass LNG Terminal LP has started the permitting process at FERC on a proposed $600 million LNG import terminal that would be located near Sabine Pass, TX, about 10 miles south of Port Arthur and not that far from another LNG import terminal being proposed by Cheniere Energy.

ExxonMobil said it expects an 18 month regulatory review followed by a three-year construction phase. It expects the project to be in service in 2008 or 2009 with an initial regasification capacity of about 1 Bcf/d, expandable to 2 Bcf/d.

The proposed project, which is being supported by Texas Governor Rick Perry, could be among several LNG terminals ExxonMobil builds along the Gulf Coast.

"Secure supplies of natural gas are critical to the continued strong economic growth of Texas and the United States," said Governor Rick Perry in supporting the project. "This project will provide jobs and other economic benefits to Sabine Pass and Southeast Texas, and bring long-term supplies of natural gas for our industries, power plants and homes."

In October, Exxon Mobil and Qatar Petroleum announced an agreement to supply 15.6 million tons a year of LNG (2 Bcf/d) to the United States from Qatar for 25 years.

ExxonMobil said it holds purchase options for potential LNG import sites in Corpus Christi, TX, and Mobile Bay, AL. The company also is evaluating possible sites for an offshore terminal in the Gulf of Mexico, where some of its top rivals, including ChevronTexaco and Shell, also are planning terminals.

Cheniere Energy has an 800-acre site across the channel from where ExxonMobil's project is expected to be built. In August, Cheniere announced that signed an agreement with Bechtel Corp. for engineering, procurement and construction of two import facilities, including one at Corpus Christi, TX, and another at Sabine Pass, LA (see Daily GPI, Aug. 28). The two Cheniere facilities each would consist of two unloading docks capable of handling ships of up to 250,000 cubic meters and three 160,000 cubic meter storage tanks, with peak vaporization capacity of 2.6 Bcf/day each.

"They could both co-exist. We had dropped the [ExxonMobil] site because we had identified some issues associated with the speed of the current and the proximity to residents so we dropped the site in favor of a better site on the Louisiana side of the Channel," said Keith Meyer, president of Cheniere LNG. "We regard ExxonMobil's presence there really as validation that the channel is very suitable for LNG terminals."

He noted that in September FERC granted a certificate to the first new LNG terminal in the Gulf Coast region, Cameron LNG, which Sempra is building in Hackberry, LA, in the same channel that receives shipments for the existing Trunkline LNG terminal (see Daily GPI, Sept. 11). Cheniere plans to file applications with FERC for both its Sabine Pass and Corpus Christi terminals in the first quarter of next year with in-service dates in late 2007.

LNG import terminals could be popping up all throughout the Gulf Coast region. Cheniere also is 30% owner of Freeport LNG, which received preliminary environmental clearance earlier this month from FERC for a proposed LNG terminal and natural gas pipeline facilities on Quintana Island in Brazoria County, TX, about 40 miles south of Galveston. The $400 million project would have a revaporization and sendout capacity of up to 1.5 Bcf/d.

Meanwhile, ChevronTexaco Corp.'s Port Pelican LNG project recently moved ahead in the race for an offshore LNG terminal in the Gulf of Mexico. Port Pelican received a deepwater port license from the Maritime Administration of the Department of Transportation, paving the way for the company to begin construction next year. The proposed terminal would be located about 40 miles off the Louisiana coastline in Vermillion Block 140.

Shell, El Paso and McMoran also are planning offshore LNG import terminals (see Daily GPI, Oct. 30, July 24, May 31). Shell recently filed its own application for a deepwater port license for its Gulf Landing terminal, which would be developed for service in 2008-09. The Shell facility would be located in West Cameron Block 213.

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