FERC has approved a request of Vista del Sol LNG Terminal LP and Vista del Sol Pipeline for a two-year project extension in part to accommodate ExxonMobil Corp.’s planned sale of its partnership interest in the project. The companies, in seeking the delay, also cited the lack of progress that has occurred on the proposed facilities.
4Gas Texas LLC, an independent developer and operator of liquefied natural gas (LNG) import terminals, has entered into agreements to buy the partnership interests in the terminal project and proposed pipeline from affiliates of ExxonMobil, said the FERC order [CP04-395, CP04-405]. The transaction is currently scheduled for closing on Dec. 3.
The Carlyle Group and Riverstone Holdings LLC, both private equity firms, have a majority shareholding in 4Gas Texas, said 4Gas, which has offices in Houston.
“Vista del Sol LNG and Vista del Sol Pipeline…state that the requested extension would help facilitate the transfer of the partnership interests,” the order said. The project, which was approved by FERC in June 2005, was supposed to be completed and in service by June 20, 2008. The completion date has now been pushed back to June 20, 2010.
Vista del Sol LNG and Vista del Sol Pipeline, in seeking the deadline extension, further noted that the additional time was needed because no construction on the project facilities has begun yet. “Vista del Sol has been pretty much sitting” since FERC approved the project more than two years ago, said ExxonMobil spokesman Bob Davis last month.
ExxonMobil last month signaled its intent to sell the Vista del Sol project near Corpus Christi, TX, to another operator before the end of the year and instead said it would focus on its Golden Pass LNG project, which is under construction in Sabine Pass, TX (see Daily GPI, Aug. 22, 2006).
“We’ve decided not to go forward with Vista del Sol, and the reason is we basically do not need two locations,” said Davis at the time. He noted that Golden Pass is farther north and is in closer proximity to ExxonMobil’s Beaumont, TX, refinery and to other gas markets. “They are both excellent sites with deep water, but we are going to be running 2 Bcf/d through Golden Pass. I think the closer proximity to the refinery from a feedstock basis,” plus the 70-mile pipeline to Starks, LA, made Golden Pass the better option.
Davis said the company has made steady progress on Golden Pass. In July 2006 ExxonMobil awarded a $1 billion lump-sum turnkey contract to Chicago Bridge & Iron Co. (CB&I) for construction of the terminal, which is expected to be completed in 2009 when it will begin receiving LNG from Qatar (see Daily GPI, Aug. 2, 2006). Golden Pass will have an import capacity to process 15.6 million tons per year of LNG.
The $600 million Vista del Sol terminal project, about two miles west of Ingleside along the Gulf Coast in San Patricio County, TX, would have sendout capacity of 1.1 Bcf/d as well as three 155,000-cubic-meter storage containment tanks and a 25.3-mile pipeline with potential interconnects with up to eight existing interstate and intrastate pipeline systems (see Daily GPI, June 16, 2005).
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