Citing jobs creation and other positive domestic economic multipliers, San Diego-based Sempra Energy on Monday filed with FERC for approval to construct liquefaction and export facilities at its existing Cameron liquefied natural gas (LNG) terminal in Hackberry, LA.
Sempra's filing comes less than a week after the release of the U.S. Department of Energy (DOE) study concluding that exporting LNG from the United States would have a relatively modest impact on domestic gas prices (see Daily GPI, Dec. 7; Dec. 6). The third-party study by NERA Economic Consulting for DOE that was released last week "demonstrates that increased LNG exports will result in net economic benefits to the U.S. economy," a Sempra spokesperson said.
The Cameron export proposal so far has been progressing successfully through the pre-filing process at the Federal Energy Regulatory Commission (FERC), Sempra said.
"Our filing keeps us on schedule to receive FERC [Federal Energy Regulatory Commission] approval and begin construction in the fourth quarter 2013," said Sempra Energy President Mark A. Snell. The liquefaction facility is expected to begin delivering LNG to international markets in 2017.
Snell further noted that the liquefaction project represents a "significant investment in new energy infrastructure in Louisiana, and will create nearly 3,000 direct jobs in the peak construction year and approximately 130 full-time jobs when fully operational. To date, FERC has only approved a liquefaction project proposed by Cheniere Energy units Sabine Pass Liquefaction LLC and Sabine Pass LNG LP to export up to 2.2 Bcf/d of LNG (see Daily GPI, April 17).
Sempra Energy said it expects that its application to export LNG to countries with which the United States does not have free trade agreements (FTA) will be among the first to be considered by the Department of Energy (DOE) early next year. It already has DOE approval to export LNG to FTA countries. The department delayed action on non-FTA applications until the release of a report analyzing the economic impacts of LNG exports.
Octavio Simoes, president of Sempra's LNG operations, said a series of public meetings held last summer "demonstrated strong community support" for the proposed project, which he said should promote stability in gas pricing and increased international trade.
The proposed liquefaction facility will use Cameron LNG's existing import facilities, including two marine berths capable of accommodating tankers; three LNG storage tanks of 480,000 cubic meters and vaporization capability for regasification services of 1.5 Bcf/d. The facility will have three liquefaction trains with a total export capability of approximately 1.7 Bcf/d, according to Sempra Energy.
Earlier this year, Cameron LNG signed commercial development agreements with Mitsubishi Corp., Mitsui & Co. Ltd. and a subsidiary of GDF SUEZ S.A., which bind the parties to fund all development costs, including design, permitting and engineering for the full capacity of the new facility (see Daily GPI, April 18).
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