FERC oks expanding Freeport LNG terminal in Texas
Fri Sep 22, 2006 5:09pm ET
today.reuters.com
WASHINGTON, Sept 22 (Reuters) - U.S. regulators approved expansion of the Freeport liquefied natural gas import terminal in Texas, the facility's owners said on Friday.
Phase II of the project will add 160,000 cubic meters of storage capacity and increase the amount of gas that can be handled at the facility from 1.5 billion cubic feet to 4 billion cubic feet per day.
The United States is forecast to consume an average 59.3 billion cubic feet of natural gas a day this year, with LNG imports accounting for about 3.2 percent of supply. It will be many years from now before the Freeport terminal will reach its full daily capacity of 4 billion cubic feet.
The expanded facility, approved by the Federal Energy Regulatory Commission, will also include an additional vessel birth to unload LNG tankers. Phase II should become fully operational in 2009, the company said.
Freeport LNG Development L.P., whose owners include ConocoPhillips (COP.N: Quote, Profile, Research), Cheniere Energy Inc. (LNG.A: Quote, Profile, Research), Dow Chemical Co. (DOW.N: Quote, Profile, Research) and Contango Oil & Gas Co. (MCF.A: Quote, Profile, Research), will own the terminal.
Phase 1 of the project, previously approved by the FERC, was designed to vaporize 1.5 billion cubic feet of gas a day and include two 160,000 cubic meeter LNG storage tanks and one vessel birth.
The first phase is about 60 percent built and its initial start-up is targeted for early 2008. The companies did not give a price tag for Phase II.
LNG is natural gas altered for transportation aboard special tankers. The gas, when cooled to minus 259 degrees Fahrenheit (minus 162 Celsius), changes into a liquid and shrinks to less than 1/600 of its original volume.
Upon arrival at a U.S. terminal, the LNG is returned to a gaseous state and fed into pipelines.
The United States will need to import much more LNG over the next 15 years to keep up with growing natural gas demand, especially for electricity generating plants fueled by gas.
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