US Energy Secretary Perry says export permit for Gulf LNG plant will benefit nation and world

Thursday, 01 August 2019
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US pipeline company Kinder Morgan and its equity fund partners have received a permit from the US Department of Energy to export domestic natural gas from the Gulf LNG export project proposed at the site of an existing import terminal near Pascagoula in Mississippi.

“This announcement advances the Trump administration’s commitment to energy security here at home and for our friends abroad,” said US Energy Secretary Rick Perry.

“Increased amounts of US LNG on the world market benefit the American economy, American workers and consumers and help make the air cleaner around the globe,” added Perry.

The DoE permit gives the Gulf project the authority to export up to 1.53 billion cubic feet per day of natural gas from the liquefaction plant being built near Pascagoula.

Gulf LNG is “authorized to export this LNG by vessel to any country with which the US does not have a free trade agreement (FTA) requiring national treatment for trade in natural gas, and with which trade is not prohibited” by US law or policy.

The Gulf terminal is to be transformed into a liquefaction plant to produce an initial 11.5 million tonnes per annum of LNG for export.

The facility is located next to the Bayou Casotte Navigation Channel and already includes a five-mile send-out pipeline and two LNG storage tanks, each with a capacity of 160,000 cubic metres.

The Gulf project was the fifth US liquefaction and export venture approved by the Federal Energy Regulatory Commission in 2019 when it issued construction permits on July 16.

“The US is in another year of record-setting natural gas production,” said Steven Winberg, Assistant Secretary for Fossil Energy at the DoE.

“I am pleased that the Department of Energy is doing its part to bring about an efficient regulatory system that allows for additional US energy to find its way into the global market,” added Winberg.

Including the Gulf LNG permit, the DoE said it had approved 34.52 Bcf per day of exports to non-free trade agreement countries.

Of this approved amount, around 14 Bcf per day is in various stages of operation and construction, with four LNG export projects currently operating and two more expected to come on stream soon.

The Pascagoula facility had originally been constructed to import LNG cargoes from Angola in southwest Africa before the US shale-gas boom from a production plant developed by international oil companies, including Chevron Corp.

It was originally owned by US pipeline company El Paso and later acquired by Kinder, which has sold 50 percent of the project to US equity funds.

These include 30 percent held by Thunderbird LNG, a unit of the Blackstone Group of fund managers.

The remaining 20 percent is held by Gulf LNG Holdings, comprising Arc Logistics Partners and Lightfoot Capital Partners equity funds.

It is interconnected to several downstream pipelines, including Transco, Florida Gas Transmission, the Destin Pipeline and the Gulfstream Natural Gas Pipeline from where feed-gas can be transported for processing and export from Pascagoula.

Kinder is currently in the process of completing a second LNG export project it is developing, the Elba Island facility near Savannah in the state of Georgia.

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