DOE okays Freeport to start LNG exports to non-FTA countries

The US Department of Energy conditionally approved Freeport LNG’s request to export domestically produced LNG from its Quintana Island, Tex., terminal to countries that do not have a free trade agreement with the US.

The conditional authorization allows exports up to 1.4 bcfd for 20 years and is subject to environmental review and final regulatory approval. DOE approved Freeport’s application to export LNG from the terminal to FTA countries on Feb. 11. The May 17 announcement was DOE’s second LNG export approval to non-FTA countries; its first for as much as 2.2 bcfd of gas came earlier in May to the Sabine Pass terminal in Cameron Parish, La.

Several oil and gas associations applauded DOE’s move. “One export permit is a step in the right direction, but many more job and revenue creating projects are still waiting for approval,” said Erik Milito, the American Petroleum Institute’s upstream and industry operation’s director.

“DOE should now move forward with the approval of the remaining applications without delay because the law presumes that all applications should be granted,” Milito maintained.

America’s Natural Gas Alliance Pres. Marty Durbin also called on DOE to approve more LNG export applications. “Selling natural gas into the global market will improve the US trade balance, deliver net jobs and economic benefits here at home and help [US President Barack Obama] achieve his goal of doubling all exports,” he said.

Independent Petroleum Association of America Pres. Barry Russell cheered what he said was DOE’s “continued diligence in approving export applications to allow market forces to work in developing facilities and negotiating contracts.”

Reflects confidence

Natural Gas Supply Association Pres. R. Skip Horvath noted, “We believe this approval demonstrates the [DOE’s] confidence in the country’s abundance of natural gas. We hope this portends more decisions where the competitive market is allowed to choose winners and losers, and that [DOE] considers and decides on additional export applications without unnecessary delay.”

Kathleen Sgamma, vice-president of government and public affairs at the Western Energy Alliance in Denver, meanwhile, said, “[DOE] has carefully studied LNG exports, and found that America benefits from exports in terms of increased economic growth and job creation. The more natural gas America exports, the more America benefits.”

Other business groups responded favorably. “Today’s decision by [DOE] represents an important next step in the recognition that America is well positioned to be a global energy leader,” Karen A. Harbert, president of the US Chamber of Commerce’s Institute for 21st Century Energy, said.

“Although we continue to believe that exports to non-FTA nations should be treated the same as FTA nations, we look forward to a timely review of additional applications that are currently pending,” Harbert added.

The National Association of Manufacturers encourages DOE to continue processing LNG export permit applications expeditiously, said Ross Eisenberg, NAM vice-president of energy and resources policy. “When it comes to energy exports, manufacturers support free trade and open markets. We believe the free market can and will work if given the chance,” he said.

Contact Nick Snow at nicks@pennwell.com.

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