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Energy Transfer: Non-FTA Export OK Coming Up
Energy Transfer Partners LP’s (ETP) Trunkline LNG Gulf Coast export project could have authorization to send liquefied U.S. gas to non-free trade agreement (FTA) countries within 60-90 days as pressure is building for the U.S. Department of Energy (DOE) to decide on the next one or two projects in the applicant queue, ETP COO Mackie McCrea said Thursday.
“Everybody knows that with the growth in shales, we need to export,” McCrea said during an earnings conference call. “I believe our government is recognizing that, and since we’re next in line [at DOE], we are very optimistic that within a short period of time, within 60-90 days, that we will receive our non-FTA permit, so it’s a project that we’re looking forward to and we’re moving forward and are very excited about it.
“There’s indications that we’re getting from Washington that they may move quicker on at least the next one or two decisions around non-FTA permits.”
DOE has been evasive about when it will act on non-FTA applications (see Daily GPI, Feb. 5). The agency has approved just one project, Cheniere Energy Inc.’s Sabine Pass, before it called a halt on others, pending further study (see Daily GPI, May 23, 2011). Exports to FTA countries are presumed to be in the public interest and are routinely approved as such.
Energy Transfer acquired the Trunkline project (see Daily GPI, Feb. 12; April 10, 2012) when Energy Transfer Equity LP (ETE) bought Southern Union Co. (see Daily GPI, March 27, 2012; June 17, 2011).
McCrea said Thursday that the company expects to file its resource report for the project by the end of this year and expects to have Federal Energy Regulatory Commission approval of the project within a year after that.
Customer contract talks are under way. McCrea said ETP should be able to disclose details “in the very near future.”
ETP CEO Kelcy Warren said the liquefied natural gas (LNG) export project “is about as fat as you can get for an MLP [master limited partnership] when you look at the amount of capital required and the time distance between spending large amounts of capital and actually creating distributable cash flow dollars to your unitholders. It’s just not a perfect fit for us…” ETE likely will exit the project at some point, he said, adding that management is “intrigued” by financing arranged by other LNG export projects, particularly by Cheniere Energy (see Daily GPI, Aug. 30, 2012; Aug. 23, 2012; Aug. 13, 2012).
ETE shares hit a new 52-week high during Thursday trading. ETE was up about 3.5% and trading around $61.39 at midday. The 52-week range is $34.00-62.45.
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