Citing current market conditions, Cameron LNG LLC has asked FERC for four additional years to complete and place into service the expansion of its liquefied natural gas (LNG) terminal in Hackberry, LA.

Cameron LNG, a subsidiary of Sempra Energy, plans to expand the sendout capacity of the terminal to about 2.65 Bcf/d from its existing 1.5 Bcf/d. The sendout capacity of the expanded terminal would be about 1.8 Bcf/d on an interim basis, ramping up to the full 2.65 Bcf/d.

In approving the project in January 2007, the Federal Energy Regulatory Commission gave the company until January 2011 to put the facilities in service (see Daily GPI, Jan. 19, 2007). Cameron LNG is now seeking to extend the date to January 2015 [CP06-422]. The existing terminal facilities went into operation in July 2009.

"Current market conditions have dictated that Cameron LNG temporarily defer construction of the expansion facilities. Cameron LNG strongly believes, however, that the expansion facilities will offer a highly competitive gas supply option when market conditions improve," the company said.

The Commission recognized the benefits of the expansion facilities in its January 2007 order, including that they would provide a stable source of incremental gas supply to domestic markets; accommodate short-term demand fluctuations and shipping pattern variations through additional LNG storage capacity; allow for the simultaneous berthing and unloading of two ships, which would increase the volume of LNG that could be offloaded over any given time; and enhance the ability of the terminal's customers to meet uniform pipeline gas quality specifications for the regasified LNG that is sent from the terminal.

"Although the expansion facilities were originally designed for the purpose of providing baseload use (i.e., LNG received at the terminal would be sent out at high-delivery rates within a short period of time of its receipt), it is now likely that the expansion facilities will serve more of a storage function," Cameron LNG told FERC.

Given the planned change in the facilities' function, Sempra Energy earlier this month asked FERC for permission to reexport LNG from the Cameron LNG terminal. Allowing LNG to be reexported would give customers the ability to store imported gas at the terminal and then export it at a later time to higher-paying markets, Sempra said in its filing at the Commission (see Daily GPI, Sept. 9).

"The location of the terminal on the U.S. Gulf Coast positions it to act as a balancing point for global supplies," the company said. "Cameron LNG expects that with the addition of significant new overseas liquefaction capacity in the near term, international prices for LNG cargoes will move into closer alignment with U.S. natural gas prices. In any event, there must be a market outlet for the additional supply and the U.S., with its vast interstate pipeline and storage network, is one of the few markets, if not the only one, able to absorb significant incremental supplies."

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