Main Pass Energy Hub (MPEH) LLC has applied to the U.S. Department of Energy (DOE) for authorization to export domestically sourced liquefied natural gas (LNG) from an existing facility 16 miles off the Louisiana Coast in the Gulf of Mexico (GOM).
The application by MPEH, a unit of Freeport-McMoRan Energy LLC, is for export over a 30-year period of up to 24 million metric tons per year of LNG -- or about 3.22 Bcf/d, 1,248 trillion Btu/year -- to countries with which the United States has a free trade agreement (FTA). MPEH said it will file later for authorization to export to non-FTA countries.
A DOE-commissioned study by an independent consultant is under way to determine the potential domestic gas price impacts of allowing LNG exports. The release of the study's findings this week was delayed (see related story).
"The proposed MPEH Deepwater Port LNG export project would be configured to receive, store, condition and liquefy domestic natural gas for export as LNG...[T]he project involves the utilization of five large existing interconnected platforms and three smaller satellite platforms," MPEH said in its filing [Docket No. 2114-LNG]. "In addition to the existing facilities, the project will consist of six FLSO [floating liquefaction storage and offloading] vessels, each capable of producing up to 4 [million metric tons per year] of LNG for a total capacity of 24 [million metric tons per year] of LNG."
In January 2007 the U.S. Maritime Administration approved MPEH as a deepwater port for the importation and regasification of LNG, conditioning of natural gas to produce natural gas liquids, and storage of natural gas in salt caverns (see Daily GPI, Jan. 5, 2007).
The facility "is located close to significant Gulf Coast natural gas production and numerous interstate pipelines and offshore gathering systems," MPEH noted.
"MPEH offers and ideal format for the use of floating liquefaction vessels, accommodating the strategic concept of maintaining the flexibility to adapt import/export programs to changing domestic and global energy supply/demand balances."
The project would be able to access nine major natural gas pipelines, providing it indirect access to the entire national pipeline grid, MPEH said. "The sources of natural gas for the project will include the vast supplies available from the Gulf Coast producing regions, including recent discoveries of shale gas reserves."
While the industry awaits DOE's findings on the impact of exports -- and its decisions on applications to export LNG to non-FTA countries -- analysts are investigating the question of how much LNG might actually be exported and its impact on the market.
Bentek Energy LLC said in a recent research note that exports of LNG from the United States could reach as high as 5.4 Bcf/d by 2020, and another 1.4 Bcf/d could be exported from Canada (see Daily GPI, Sept. 17). Others think the volume of gas will be more modest.
Ken Medlock, a Baker Institute energy fellow at Rice University in Houston, said the United States will be "lucky to see more than 1 Bcf/d" of exports 10 years from now. "I don't think it's going to be a huge number," he told NGI recently (see Daily GPI, Aug. 9).
Cheniere Energy Partners has the first and only LNG export project to receive DOE authorization to export to FTA and non-FTA countries (see Daily GPI, Aug. 13). A Bentek Energy analyst recently named the Sabine Pass project as being among a handful of those proposed that have the best chance of coming to fruition (see Daily GPI, Sept. 12).
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