A subsidiary of BG Group plc, which has a long-term contract for 100% (starting in 2005; 80% currently) of the liquefied natural gas (LNG) capacity at the Lake Charles LNG facility in Louisiana, is planning to build a new 40-mile gas pipeline to carry regasified LNG from the terminal to additional pipelines in Louisiana.

Lake Charles Express LLC (LCE) will be soliciting market interest next month (June 6-16) in the proposed $60 million pipeline in Southern Louisiana.

“Liquefied natural gas is becoming an increasingly significant part of North America’s energy mix,” said LCE CEO Elizabeth Spomer. “This proposed pipeline would provide increased operational reliability and flexibility for importing liquefied natural gas through the Lake Charles terminal.

“With the planned expansion of the Lake Charles terminal approved for 2005, this pipeline would support the development of a liquefied natural gas trading hub in Southern Louisiana with market access to the East Coast via interconnecting pipelines.” Currently the regasified LNG flows through CMS Trunkline pipeline to the MidContinent.

The Lake Charles LNG facility, which Southern Union is in the process of buying from CMS Energy (see Daily GPI, May 13), currently is capable of storing 6.3 Bcf of LNG and sending out about 630 MMcf/d. But the facility is undergoing an expansion that will bring peak daily sendout to 1.2 Bcf/d and storage capacity to 9 Bcf by the end of 2005 (see Daily GPI, March 25).

The proposed pipeline would transport gas to Texas Eastern’s Gillis compressor station in Beauregard Parish from the import terminal. Depending upon requests from customers, LCE would establish links with Transcontinental Gas Pipe Line, Tennessee Gas Pipeline, Florida Gas Transmission and Texas Gas Transmission.

LCE anticipates a minimum design capacity of 1.2 Bcf/d via two pipeline sections, a 36-inch diameter piece and a 30-inch diameter section. It will consider design modifications based on customer requirements. Operations are projected to begin Jan. 1, 2005.

Last week. BG Group bolstered its LNG supply with two large long-term contracts that could bring to U.S. markets a total of 5.9 million tonnes of LNG per year (274.2 Bcf/year) (see Daily GPI, May 14). BG announced long-term LNG supply arrangements for Lake Charles, including a 20-year contract with Nigeria LNG for 2.5 million tonnes per year beginning in 2005 or 2006 and a 17-year contract with Marathon for 3.4 million tonnes per year beginning in 2007.

BG also is involved in developing LNG production facilities in Trinidad and Tobago, Egypt, the Pacific Coast of South America, and Indonesia. In Italy and India, it is developing LNG import projects. BG also has access to a fleet of LNG tankers, including two that it owns, four under long-term charter, two new ships arriving in 2004, and it has options on an additional five new ships.

To learn more about the pipeline project, contact Kerry Roberts at (713) 403-3753 or Kerri.Roberts@bglng.com.

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