Constellation Energy Commodities Group Inc. (CCG) on Friday announced a short-term liquefied natural gas (LNG) regasification agreement with Freeport LNG Development LP to allow it to access LNG capacity at the terminal now under construction near Freeport, TX.
Under the agreement, the wholesale arm of Constellation Energy will be able to bring LNG cargoes to the facility through September 2009. Commercial operations are expected to begin in 1Q2008 at the Freeport facility, and CCG's agreement will begin when the operations are under way.
"Entering into this agreement will allow Constellation Energy to be an active player in the spot LNG cargo tender process," said CCG Co-President Felix Dawson. "This transaction will allow us to supplement our domestic gas supply portfolio with LNG production from around the world."
The facility's initial phase will have vaporization capacity of 1.75 Bcf/d (including more than 200 MMcf/d of peaking capacity), two 160,000 cubic meter LNG storage tanks and unloading facility designed for ships up to 250,000 cubic meters. Last September, the Federal Energy Regulatory Commission authorized Freeport LNG to increase the sendout capacity to 4 Bcf/d (see Daily GPI, Sept. 25, 2006). The second expansion phase is scheduled for completion in September 2009.
"Freeport LNG is excited about this transaction with Constellation Energy," said Freeport LNG CEO Michael Smith. "One of the most satisfying aspects of developing Freeport LNG has been the relationships we've created. I consider having Constellation Energy as one of our customers another milestone in Freeport's accomplishments."
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