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Sabine Blasts Opponents of LNG Exports

The two companies seeking to build a liquefaction facility to support the export of liquefied natural gas (LNG) from their existing terminal in Louisiana are asking the Federal Energy Regulatory Commission (FERC) to reject arguments that the project would negatively affect gas prices and the nation's energy independence.

In a motion to leave for answer filing on Monday, Sabine -- which comprises Sabine Pass Liquefaction LLC and Sabine Pass LNG LP -- said it opposed motions to intervene by the American Public Gas Association (APGA) and the Gulf Coast Environmental Labor Coalition (GCELC), arguing that both groups failed to meet FERC rules for intervention by not identifying their members or stating what their interests are (see Daily GPI, March 8).

"GCELC's interest clearly is centered in the development of generic policy related to environmental and social issues, not in specific factual or legal arguments raised in this proceeding," Sabine said, adding the APGA was raising "generic policy issues concerning whether the United States should allow the export of domestic natural gas supply and potential alternate uses for natural gas that policymakers should consider."

Sabine is seeking federal approval to build the liquefaction facility at its LNG terminal in Cameron Parish, LA. Once completed, the facility would have the capacity to export about 2.2 Bcf/d on average over a period of one year (see Daily GPI, Jan. 21).

With North American oil and gas shale plays recently being unlocked, LNG export plans are on the table from coast-to-coast-to-coast, offering a tantalizing option for buyers in Europe and the Asia Pacific region that want secure and reliable energy supplies, a Wood Mackenzie Ltd. energy analyst told NGI this week (see Daily GPI, March 24).

If any of the export projects are able to carry gas supplies to overseas ports, North America would begin to integrate with world gas markets -- and higher prices, said Noel Tomnay, who heads Wood Mackenzie's Global Gas Research.

Sabine blasted GCELC's call for an environmental impact statement (EIS) for the project -- instead of the environmental assessment that Sabine Pass supports -- because of impacts on air quality, wetlands, aquatic resources and shoreline security.

"Once again, GCELC relies on conclusory statements that an EIS is warranted," Sabine said. "The project will not result in any impacts to aquatic resources in the port vicinity or any increased demands on the Coast Guard for protection of shoreline security. [Also] Sabine Pass is not proposing to increase ship traffic, and there will be no increase in the number of LNG ships over that reviewed and approved by the Coast Guard."

Sabine also took issue with APGA's protest of the project, arguing that its anti-competitive position was not consistent with current U.S. policy and that the association ignores factual and empirical data.

"APGA appears to believe that disallowing exports will create an oversupply situation in the U.S., and as a consequence, the price of natural gas will significantly decline for U.S. consumers," Sabine said. "But APGA fails to acknowledge that absent adequate economic incentives, producers will shut in wells and investments in production basins will decline.

"The ability to export domestic gas as LNG will greatly expand the market scope and access for domestic natural gas producers and thus serve to encourage domestic production at times when U.S. market prices might not otherwise do so."

Sabine also filed answers to comments by Chevron USA Inc. and Kinder Morgan Louisiana Pipeline LLC (KMLP), two companies that support the project. Addressing Chevron, Sabine said the public forum through FERC was an inappropriate place to discuss its private business matters or its terminal use agreement with Chevron. Sabine then told KMLP that it would not favor one pipeline over another after the project is built.

"Sabine Pass does not intend to discriminate against any future pipeline interconnection with the liquefaction project or against any pipeline in agreeing to any future delivery connection," the company said.

In a related matter, Shell US Gas & Power LLC filed an out-of-time motion to intervene with the FERC on Monday.

"While Shell does not wish to take a position on the LNG export facility application of [Sabine] at this time, Shell nonetheless seeks the opportunity for late intervention because of its substantial interest in the outcome of this proceeding," Shell said.

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