There’s more than enough gas from the Lower 48’s burgeoning shale plays and elsewhere to allow for the export of some of it in the form of liquefied natural gas (LNG), Sabine Pass Liquefaction LLC said in its application to do just that, recently filed with the U.S. Department of Energy’s Office of Fossil Energy.
Earlier this year Cheniere Energy Partners LP said it would seek to export LNG on a long-term basis from its Sabine Pass LNG receiving terminal in Cameron Parish, LA, making the terminal a bi-directional facility (see Daily GPI, June 7) and the only permanent LNG export facility in the Lower 48.
Sabine Pass Liquefaction filed the first of two applications with DOE’s Fossil Energy office last week. If the first one is granted, it would allow the export of LNG “to any nation that currently has or develops the capacity to import LNG and with which the United States currently has, or in the future enters into, a Free Trade Agreement, requiring the national treatment for trade in natural gas and LNG,” the application said.
A separate application is to be filed soon for authorization to export LNG to countries with which a Free Trade Agreement applicable to natural gas and LNG is not in effect, Sabine Pass Liquefaction said, noting that this application will be subject to more rigorous public interest review and analysis by DOE.
“The pipeline infrastructure connected to the Sabine Pass LNG terminal allows Sabine Pass and its customers to purchase gas for export from any point in the U.S. interstate pipeline system; however, the historically prolific South, East, and Gulf Coast Texas onshore gas fields, the gas fields in the Permian, Anadarko and Hugoton basins, and the well documented unconventional gas fields in the Barnett, Haynesville, Eagle Ford, Fayetteville, Woodford and Bossier basins would represent the most likely sources of physical supply,” the Cheniere unit said in its filing. “…[T]he proposed exports are not anticipated to have any meaningful impact on the availability of natural gas to the region.”
Further the application noted that the granting of export authorization would be consistent with the Obama administration’s “current and long-term policy objectives to stimulate the economy by promoting exports.” It pointed out that in March President Obama unveiled the National Export Initiative, which is intended to reduce barriers to U.S. exports.
“Although DOE is not required to make a public interest finding, it is evident from the current supply-demand balance of natural gas in the United States that the request for Authorization to export domestic natural gas production is in the public interest,” Sabine Pass Liquefaction said.
Additionally, the application pointed out that in granting Cheniere Marketing LLC’s earlier request to export previously imported LNG the Office of Fossil Energy noted “‘the increased supply of domestic production, flat to declining natural gas consumption and decreased imports of LNG’ in approving the request for export authorization. It stands to reason that the ability to export domestic gas as LNG will greatly expand the market scope and access for domestic natural gas producers and thus serve to encourage domestic production at times when U.S. market prices might not otherwise do so.”
Sabine Pass Liquefaction said the dual capability of its facility will not result in an increase in the number of tanker transits since the total amount of LNG processed through either liquefaction or vaporization will not exceed an average of 4 Bcf/d.
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