ConocoPhillips last week finalized a transaction with Freeport LNG Development LP to acquire 1 Bcf/d of regasification capacity at its proposed liquefied natural gas (LNG) receiving terminal set to be built in Quintana, TX, obtained a 50% interest in the general partner managing the venture, and it said it would provide “substantial” construction funding.

The proposed terminal, which was approved by the Federal Energy Regulatory Commission last month, is expected to receive all other necessary regulatory approvals in the third quarter (see NGI, June 28). Construction is scheduled to begin in the fourth quarter, with commercial startup planned for the second half of 2007.

“This project is a critical link for the development of one or more of several LNG projects under consideration by ConocoPhillips that will deliver clean natural gas to the United States’ growing market,” said Sig Cornelius, ConocoPhillips president, Global Gas. “It is a strong addition to the company’s growing LNG portfolio.”

ConocoPhillips said in a statement that the current management of Freeport LNG will remain in place and oversee the commercial activities of the partnership. However, ConocoPhillips will lead the construction management and oversee the facility’s operation. Freeport LNG is 60% owned by privately held Freeport Investment and also is partially owned by two Houston-based independents, Cheniere Energy Inc., with a 30% interest, and Contango Oil & Gas, which has a 10% stake.

The proposed terminal is designed with storage capacity of nearly 7 Bcf and send-out capacity of 1.5 Bcf/d. Natural gas will be transported through a 9.4-mile pipeline to Stratton Ridge, TX, which is a major interconnection with the state’s intrastate gas pipeline system. At Stratton Ridge, Freeport said it is considering connections with five intrastate pipelines: Dow Pipeline Co., Kinder Morgan Texas Pipeline Co. LP, Houston Pipeline Co., Texas Utilities Pipeline Co. and Enterprise Pipeline LP.

The proposed terminal will include a marine terminal, LNG transfer lines, vaporization units and two LNG storage tanks, which will each have the capacity to hold 3.5 Bcf/d, LNG storage and vaporization units. The marine terminal will have the capability to unload 200 ships per year.

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