US clears Cameron for unrestricted LNG exports

11 February 2014 16:57 Source:ICIS

The Cameron LNG project in Louisiana has become the fifth US liquefaction plant to receive approval to export to countries that do not have a free trade agreement (FTA) with the US government.

The US Department of Energy (DOE) announced on 11 February that the planned 12mtpa capacity project has received its conditional approval, and will pave the way for operator Sempra Energy to move ahead with finalising commercial and financing agreements ahead of project sanction. The US company has indicated that it plans to finalise project financing in early 2014.

This is the sixth non-FTA application issued by the US DOE. The last conditional order was granted to US Freeport LNG’s expansion volumes on 15 November 2013.

Cameron’s volumes are contracted in long-term agreements with Paris-based energy group GDF SUEZ and Japanese trading companies Mitsubishi and Mitsui, each with 4mtpa of offtake each. The liquefaction fee that three companies pay Sempra for the Cameron volumes is understood to be just above $3.00/MMBtu, according to market sources.

More than 20 applications have been filed by companies seeking to export to non-FTA nations. The US DOE has discretionary approval in granting non-FTA applications, although applicants automatically receive approval to trade with countries in FTAs with the US.

Sempra first applied for non-FTA approval in December 2011.

This now puts the cumulative total of capacity approved so far by the US DOE at about 64mtpa.

The last approval granted on 15 November 2013 by the US Department of Energy (DOE) were the remaining expansion volumes for the three-train, 13.2mtpa Freeport LNG tolling facility.

Sempra and its Cameron offtakers can now progress to finalising its engineering, procurement and construction (EPC) provider for the estimated $7bn project. Two top contenders were understood to be considered as the EPC provider: US-based CB&I, and a consortium made up of Texas-based Fluor and Japanese manufacturer JGC. Ruth Liao

By Ruth Liao