FERC on Friday gave the green light for CMS Trunkline LNG Co. LLC to begin construction of expansion facilities at its liquefied natural gas (LNG) import terminal near Lake Charles, LA, but it’s likely the job will be carried out by the LNG company’s prospective new owner, Southern Union Co.

The project would expand what already is the largest North American LNG terminal by adding a second marine unloading dock and enlarging CMS Trunkline LNG’s storage and sendout capabilities.

Plans include construction of a fourth storage tank, which would increase storage capacity to 9 Bcf from its current 6.3 Bcf; and would almost double the facility’s daily sendout capacity to 1.2 Bcf/d from 0.63 Bcf/d. The plans submitted to FERC by CMS Trunkline LNG’s also include building a second unloading dock, which would give it the ability to unload two ships simultaneously.

A companion project would increase the deliverability from the Lake Charles terminal into CMS Trunkline’s pipeline system to 1.2 Bcf/d from 1 Bcf/d [CP02-55].

The entire expansion is expected to cost $177.2 million, and has been targeted for in-service in January 2005.

The Lake Charles LNG facilities were among the assets that parent company CMS Energy Corp. put on the auction block last August to help improve its balance sheets (See Daily GPI, Aug. 8, 2002). In December, CMS Energy reached a definitive deal to sell the LNG facilities and its Panhandle gas pipelines to a joint venture of Southern Union and AIG HighStar Capital LP for an estimated $1.83 billion, but the sale has not closed yet (See Daily GPI, Dec. 24, 2002).

“At the point of the sale closing, CMS Energy will be out of it [the LNG expansion],” said CMS spokesman John Barnett. A spokesman for Southern Union previously indicated that the LNG project would continue “on track” following the completion of the sale.

FERC issued CMS Trunkline LNG a certificate in December to carry out its terminal expansion project (See GPI Daily, Dec. 19, 2002). At the same time, the Commission awarded Dynegy Corp. preliminary approval for its proposed Hackberry terminal in Louisiana — the first new LNG terminal approved for construction in the United States in 25 years. It is scheduled to begin operation in 2006.

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