LNG

The US Department of Energy’s Office of Fossil Energy has delivered a new report on likely impacts of the “ill-conceived” ban on hydraulic fracturing proposed by the incoming Administration that would cost millions of jobs and make gasoline and electricity prices much higher for all Americans while risking a recession.

The US Department of Energy has extended the terms of five long-term liquefied natural gas export authorizations through 2050 for plants in Louisiana, Texas, Georgia and Florida.

US President Donald Trump said during a speech in Midland, Texas, that the Department of Energy is issuing a final policy statement that allows for liquefied natural gas exports to Non-Free Trade Agreement countries to be extended through the year 2050.

The US Secretary of Energy Dan Brouillette has issued a final long-term order authorizing the export of domestically produced liquefied natural gas from the proposed Jordan Cove LNG Terminal at Coos Bay in the northwest state of Oregon.

The export permit, which had previously been conditional, follows the approval by the Federal Energy Regulatory Commission announced March 2020 for the siting, construction, and operation of the Jordan Cove liquefaction plant and the related Pacific Connector Pipeline.

“The export authorization for Jordan Cove, the first US West Coast LNG project, will ease access to further position the US as a top supplier of LNG around the world,” said Secretary Brouillette.

“The issuance to Jordan Cove serves to further expand opportunities for US LNG abroad, particularly in the growing markets of Asia, and encapsulates what the Trump Administration has been working hard on for the past three years - providing reliable, affordable, and cleaner-burning natural gas to our allies around the world,” stated Brouillette.

The development company, the Jordan Cove Energy Project is owned by Canada’s Pembina Pipeline Corp. and it now has the authority to export up to 1.08 billion cubic feet per day of natural gas as LNG.

The DoE statement said the project’s natural gas will be sourced from both Canada and the United States and would be liquefied at the Jordan Cove facility for export to any nation worldwide, unless trade is prohibited by US law.

Calgary, Alberta-based Pembina acquired the Jordan Cove LNG project in late 2017 in its takeover of another Canadian company, Veresen Inc.

The project includes a 230-mile pipeline which would traverse four counties in Southern Oregon on the route to the liquefaction plant.

The liquefaction plant and other facilities are planned for a 200-acre site and comprise five small-scale Trains each with 1.5 million tonnes per annum of output for a total of 7.8 MTPA.

“As we work to overcome the Covid-19 pandemic, LNG exports are going to be one of the building blocks toward the United States’ economic recovery,” said DOE’s Assistant Secretary for Fossil Energy Steven Winberg.

“The US has exported LNG to 38 countries, with this authorization to Jordan Cove, the United States can look to increase that number with expanded geographic coverage for LNG exports into key importing markets in Asia, providing enhanced economic opportunities both here in the US and globally,” added Winberg.

Jordan Cove has multiple facilities, including two full-containment storage tanks with total capacity of 320,000 cubic metres, gas treating infrastructure, an export jetty and access to more than 25 billion cubic feet per day of gas supply from Western Canada and the US Rockies.

The project’s Pacific Connector pipeline will have a 36-inch diameter with capacity to transport up to 1.2 billion cubic feet of natural gas per day.

Feed-gas for Jordan Cove would be sourced at the Malin Hub, creating a new outlet for natural gas from areas such as the Rockies Basin.

The export plant is expected to be visited by about 120 LNG carriers per year and Pembina has signed preliminary accords with Jera Co. Inc. and Itochu Corp. of Japan for the supply of cargoes.

US Federal Energy Regulatory Commission Chairman Neil Chatterjee said at the plenary session of the Gastech 2019 conference in Houston that there were important potential climate benefits from US liquefied natural gas exports, especially for Asian countries.

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.

The US Department of Energy has eased reporting mandates for liquefied natural gas exporters that would keep track of the ultimate end-user of the natural gas shipped overseas.