UpdateDow lauds LNG export decision, calls it a ‘prudent step’

17 May 2013 23:29  [Source: ICIS news]

Dow lauds LNG export decision, calls it a ‘prudent step’HOUSTON (ICIS)--Dow Chemical praised the US Department of Energy’s (DOE) decision on Friday to allow a second non-Free Trade Agreement (FTA) export permit for liquefied natural gas (LNG), calling it a “prudent step in pursuit of a measured and balanced approach”.

The DOE announced on Friday that it has granted Freeport LNG conditional authorisation from to export LNG to non-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.

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.

But the US chemical major said on Friday that the DOE’s Freeport decision was “a step toward a more robust national energy strategy and provides the greater clarity and certainty that businesses need to make investment decisions”.

Where some what free rein for exports and others want none at all, Dow actually has been in the middle ground of that debate, said George Biltz, vice president of energy and climate change for the company.

“Free trade and exports are next to God and motherhood,” Biltz said of Dow’s backing of the concepts in general. “We think it’s very positive that the DOE hasn’t gone to either [export argument] extreme.”

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.

Dow called the invoking of the public interest determination as key to following the law, and that it will have a “wait-and-see” approach to further approvals.

With LNG export contracts lasting 15-20 years in some cases, permit approvals create fixed demand for the product over a fixed amount of time during which markets can change, Biltz said. The DOE’s measured approach is “wise” under such circumstances, he said.

“We’re pleased they’re taking that approach,” he said.

By: Jeremy Pafford
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