Liquefied natural gas (LNG) continues to take center stage as CMS Energy Corp. reported on Thursday that its Trunkline LNG Co. recently inked a 22-year contract that would give United Kingdom-based BG Group all of the current uncommitted capacity at CMS’s Lake Charles, LA, LNG terminal.

The contract, which takes effect in January 2002, will give BG Group the right to 5.1 Bcf of uncommitted vaporization and storage capacity. After another one of CMS’s contracts expire in August 2005, BG’s stake will rise to 6.3 Bcf. CMS said this transaction, along with other commitments made, will bring total annual revenues from the facility to $450 million.

“This long-term contract with BG solidifies CMS Trunkline LNG’s position as the U.S. leader in the LNG industry,” said Christopher A. Helms, president of CMS Panhandle Pipe Line Cos. “The agreement fulfills two of our major objectives: to maximize the value of the terminal for CMS Energy and to ensure long-term natural gas supply attachment to our pipelines. This contract also helps to enhance long-term natural gas supply availability for the United States as LNG plays an increasingly important role in the security of the United States’ energy supply.”

BG Group CEO Frank Chapman said the deal “underpins BG’s growing reputation as ‘The Integrated Gas Major’ by providing significant long-term access to the world’s largest natural gas market. The agreement reinforces our LNG portfolio and puts BG in a pivotal position to supply the U.S. natural gas market from our LNG export projects. There are major opportunities in the U.S. downstream gas market which is being targeted as a channel for LNG by a number of producers. Until today, the Lake Charles facility was the only terminal in the U.S. with significant uncommitted capacity.”

BG said its newly contracted capacity at the Lake Charles terminal gives the company numerous options, including physical trading of LNG cargoes, using its own shipping resources and down the road, selling its own equity LNG production into the U.S. market.

The Lake Charles terminal, which is the largest operating North American terminal, currently receives gas from Europe, Africa, Asia, South America and Australasia. Future imports could come from developing or expanding LNG export projects in Angola, Egypt, Nigeria, Norway, Trinidad and Venezuela, CMS said.

The announcement comes just days after a Deutsche Bank report positioned BG Group as one of the leading LNG companies, poised to take a step increase in its exposure to this expanding global LNG market (see Daily GPI, May 16).

BG currently holds a 26% share in the Atlantic LNG Co. in Trinidad, which produces 3 million tons of LNG per year for export to Spain, Puerto Rico and the United States. The company said there are an additional two trains under construction that will boost LNG production to over 9 million tons a year. The company is also currently involved in an agreement with the Egyptian General Petroleum Corp. and ENI of Italy for an LNG export project, which will be headed by a new company, Egyptian LNG. The new company will build, own and operate a liquefaction plant with the first train due to come on stream in 2005. BG said the United States is being targeted as a potential market for the new endeavor. In addition, BG said it plans to play roles in projects in Indonesia, southern Italy and India.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.