US officials approve proposal to export LNG to non-FTA countries

17 May 2013 20:12  [Source: ICIS news]

US officials approve proposal to export LNG to non-FTA countriesHOUSTON (ICIS)--Freeport LNG has obtained conditional authorisation from the US Department of Energy (DOE) to export LNG to non-Free Trade Agreement (FTA) countries from a Texas terminal, the DOE announced on Friday.

Should the Quintana Island facility pass an environmental review and receive regulatory approval, the terminal is conditionally authorised to export 1.4 billion cubic feet (bcf)/day of LNG for 20 years, the DOE said in a press release.

Freeport previously obtained approval to export LNG from the facility to FTA countries in February 2011.

The decision is the second by the DOE in regard to exports to non-FTA countries. In May 2011, the department authorised 2.2bcf/day of exports from Sabinal Pass LNG Terminal in Cameron Parish, Louisiana.

Federal law generally requires approval of LNG exports to countries that have an FTA with the US. Under the Natural Gas Act, export approvals of LNG to countries that do not have an FTA with the US will be reviewed and granted unless the department finds that the proposed exports “will not be consistent with the public interest”, the DOE said.

LNG exports have been a hot topic of debate in the chemicals industry, a business that relies on natural gas for about 85% of its feedstock requirements.

The DOE has issued two studies, a report conducted by the Energy Information Agency (EIA) in January 2012 and an analysis by NERA Economic Consulting in December 2012.

Dow spoke out against the DOE studies, saying they failed to consider the importance of manufacturing on the US economy.

Since then, several chemical producers have formed a coalition to campaign for the restriction of LNG exports.

However, ExxonMobil said restricting LNG exports could hurt the US economy.

In its decision in favour of Freeport LNG’s request, the DOE said that it found the NERA report to be “fundamentally sound”.

The DOE said it will proceed cautiously with the more than 20 other non-FTA permit applications that are awaiting approval, taking a “measured approach” and monitoring the natural gas market to make sure that the granting of successive applications do not harm the public interest.

By: Jeremy Pafford
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