CMS gets FERC go ahead for LNG expansion

CMS Energy Corp. Tuesday said it received final approval from the federal government to boost its LNG capacity in Louisiana by 40% to 1 bcfd and is already evaluating further expansion to 1.3 bcfd. CMS's decision to add 300 MMcfd of gas capacity at its Lake Charles terminal comes during a flurry of announcements by companies looking to establish new US terminals, while gas producers struggle to keep up with demand and prices remain at record levels.


By the OGJ Online Staff

HOUSTON, Apr. 3�CMS Energy Corp. Tuesday said it received final approval from the federal government to boost its LNG capacity in Louisiana by 40% to 1 bcfd and is already evaluating further expansion to 1.3 bcfd.

CMS's decision to add 300 MMcfd of gas capacity at its Lake Charles terminal comes during a flurry of announcements by companies looking to establish new US terminals, while gas producers struggle to keep up with demand and prices remain at record levels.

CMS said the decision by the Federal Energy Regulatory Commission will permit the company's Trunkline LNG unit to begin immediately making modifications at its LNG terminal and to have the new capacity on line by June.

�Increasing our daily natural gas send out capability to one billion cubic feet will enable us to have greater efficiency, flexibility, and reliability to serve growing customer demand and provide our customers with more options,'' said Christopher A. Helms, president of the CMS Panhandle Pipe Line Cos.

In 2000, there were 55 LNG tanker ships unloaded at the CMS Trunkline LNG terminal. The company said it expected the number to be higher this year.

Work is also under way at Cabot LNG's Everertt, Mass., terminal to double vaporization capacity to more than 1 bcf from 435 MMcfd.

The US unit of Belgium�s Tractebel has the only other operating LNG terminal in the country.

High prices in the US West have helped spur interest in LNG shipments from the Asia Pacific area. El Paso Corp. said in March it tentatively agreed to begin purchasing LNG from a Phillips Petroleum Co. plant near Darwin, Australia, and ship it to California or Mexico. El Paso said it is still evaluating potential terminal sites.

Chevron Corp.also reported it was studying plans to start shipping LNG from Australia to the US West Coast by 2005. And in January, Enron Corp. said it was considering a new LNG import terminal in the Bahamas, connected by a 90-mile pipeline to Florida. Even if gas prices appear to support these proposed projects, the plans will be subject to lengthy regulatory scrutiny and approval.

The two other US LNG import terminals, at Cove Point, Md., and Elba Island, Ga., are expected to reopen in 1-3 years. If that happens, all four US LNG terminals would be back in operation for the first time since 1982.

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