The Lower 48 United States has inched closer to being an exporter of domestically sourced liquefied natural gas (LNG) with the granting of U.S. Department of Energy (DOE) export authorizations to two different projects.

A joint venture formed by Houston-based Southern Union and BG LNG Services LLC, a subsidiary of BG Group plc — Lake Charles Exports LLC — has received approval from DOE to export liquefied natural gas (LNG) to countries with which the United States has a free trade agreement (FTA). DOE also recently approved plans by a startup company to export small volumes of containerized LNG.

Southern and BG sought the approval to export liquefied domestically produced gas in May (see NGI, May 16). They also sought approval to export LNG to non-FTA countries. DOE did not approve the expanded exports, but said it will be reviewed pursuant to the Natural Gas Act.

Countries with which the United States has an FTA applicable to natural gas are Australia, Bahrain, Singapore, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Chile, Morocco, Canada, Mexico, Oman, Peru and Jordan, according to DOE’s order.

Before it can export LNG, the company will have to construct liquefaction facilities, according to Southern Union. The joint venture plans to export 2 Bcf/d over a 25-year period, beginning on the earlier of the date of the first export or 10 years from the approval of the application.

The partnership was formed more than a year after Southern Union received approval from the Federal Energy Regulatory Commission to place into service its Trunkline LNG Infrastructure Enhancement Project, which involved the installation of four ambient air vaporization units and the construction of a natural gas liquids (NGL) extraction facility at the Trunkline LNG Co. LLC regasification terminal in Lake Charles (see NGI, March 22, 2010). BG LNG Services is the facility’s customer.

Earlier this year Cheniere Energy Partners LP unit Sabine Pass Liquefaction LLC received DOE approval to liquefy and export U.S. gas from the existing Sabine Pass import terminal to any country that has or develops import capacity (see NGI, May 23). The order expanded upon an authorization Sabine received last September that authorized exports to all current and future FTA countries (see NGI, Sept. 13, 2010).

Separately, DOE also recently granted authorization for Carib Energy (USA) LLC to export containerized LNG to FTA countries in Central America, South America and the Caribbean.

“This is a very key ruling, as it will allow us to begin delivery of a key natural resource to countries that desperately need it,” said Carib Energy President Greg Buffington. “With this new long-term authorization, Carib Energy is now positioned to become a significant exporter of liquefied natural gas to FTA countries.”

According to the DOE order, startup company Carib has said that for the most part no facility modifications or additions will be needed in order for the company to export LNG.

“Carib will take delivery of LNG at the site of existing liquefaction facilities located throughout the southeastern United States, purchasing relatively small LNG quantities, and in most cases, making use of excess LNG capacity, which is available for sale, as well as natural gas, which can be liquefied at liquefaction facilities,” the order said. “Carib will transport the LNG from the liquefaction facilities within the United States over both highways and via rail.”

Buffington told NGI buyers of the LNG will be commercial users in the Caribbean and Central America as well as small power plants that want to burn natural gas along with diesel fuel.

“Most of our customers we are speaking to are 10 MW facilities and smaller as well as some larger…” he said in an e-mail. Buffington said Carib also is pursuing authorization to ship LNG to non FTA countries.

Carib Energy filed an application at the DOE earlier this year to export LNG from the United States. It will transport the LNG from liquefaction facilities using approved 40-foot long LNG containers transported on ocean-going carriers. The containers will comply with all necessary regulations, as will third parties with whom Carib contracts to handle such transportation, the company said.

Carib is permitted to transport up to 11.53 Bcf of gas per year for a 25-year term. It said it plans to begin exporting “immediately.”

Carib Energy, which is based in Coral Springs, FL, is a limited liability company owned by Everything for Gas International LLC and Argosy Transportation Group Inc.

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