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Southern Union, BG Form JV to Export LNG

A joint venture formed by Houston-based Southern Union and BG LNG Services LLC, a subsidiary of BG Group plc, has filed an application with the Department of Energy (DOE) to export liquefied natural gas (LNG).

Southern Union President Eric D. Herschman made the announcement Monday in association with the company's first-quarter earnings report. In its filing with the DOE, the joint venture is seeking "long-term authorization to export domestically sourced liquefied natural gas from [Southern Union's] liquefied natural gas import facility in Lake Charles, LA," he said.

Before it can export LNG, the company will have to construct liquefaction facilities, according to Southern Union. The joint venture seeks to export 2 Bcf/d over a 25-year period, beginning on the earlier of the date of the first export or 10 years from the approval of the application.

The announcement came more than a year after Southern Union received approval from the Federal Energy Regulatory Commission to place into service its Trunkline LNG Infrastructure Enhancement Project (IEP), which involved the installation of four ambient air vaporization units and the construction of a natural gas liquids (NGL) extraction facility at the Trunkline LNG Co. LLC regasification terminal in Lake Charles (see Daily GPI, March 16, 2010). BG LNG Services is the facility's customer.

BG Group has forecast worldwide gas demand to grown 3% a year through 2020, which it said would eat up any oversupply concerns and in fact tighten LNG markets (see Daily GPI, Feb. 9).

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