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Two Gulf LNG terminals approved Chevron, independent firm get FERC permission for Mississippi terminals that can import up to 3.1 bcf daily between them Allen Baker For Petroleum News
Two terminals a mile apart have been OK’d for importing liquefied natural gas into the Pascagoula, Miss., area, near several major interstate pipelines. The Federal Energy Regulatory Commission announced the approvals Feb. 15.
“Our natural gas markets are changing fundamentally. North American natural gas supply is no longer sufficient to meet North American demand, and LNG will play a more important role in meeting U.S. natural gas supply needs,” FERC Chairman Joseph T. Kelliher said in a statement issued with the approvals.
“These are significant import projects, with a combined capacity nearly equal to the projected capacity of an Alaskan gas pipeline.”
One of the terminals is to be built by a unit of Chevron Corp. adjacent to a Chevron refinery. The second project is being promoted by Gulf LNG Energy LLC of Houston, a group of private investors including Sonangol, the state oil company of Angola.
FERC also approved a pipeline expansion to serve the Cheniere Energy Inc. LNG terminal in Cameron Parish, La., an increase in capacity of the Maritimes & Northeast Pipelines to import regasified LNG into the U.S. Northeast from Canada, and new natural gas storage of as much as 17 billion cubic feet of gas in salt domes under southern Mississippi.
Refinery synergies The Chevron project, a 264-acre development called Casotte Landing, will have some economic advantages due to its location alongside the refinery, which could take some of the natural gas liquids in the gas stream as well as providing waste heat to aid in regasification of the LNG. FERC approved a peak volume of 1.6 bcf of gas daily for the facility.
“There are many inherent synergies with locating a refinery and a natural gas import terminal together, including marine operations and closed-loop regasification,” said Roland Kell, Chevron’s Pascagoula Refinery general manager.
Gulf LNG has approval for a $450 million terminal that can handle 1.5 bcf per day. The project is planned on land controlled by the local port authority and county, bordering the Bayou Casotte ship channel a mile downstream from the refinery.
Plenty of LNG ports FERC has approved more than a dozen new LNG terminals, mostly along the Gulf coast where the nation’s web of pipelines is most dense and where public opposition to the terminals is least vocal.
Those approved projects, along with the five already operating, have the theoretical capacity to import more than half of the 61 bcf of gas consumed in the United States each day.
But LNG imports have declined the last two years, with less than 2 bcf daily coming to U.S. shores last year as producers bypassed this country to sell their cargoes for higher prices in Europe.
U.S. Energy Department economists expect imports to increase in the next two years by 1.4 bcf daily as new production comes on line in Equatorial Guinea, Nigeria, Norway, and Qatar.
That still won’t fill 30 bcf of daily capacity, and several of the terminals are likely to be mothballed before or during construction. Others could be lonely outposts for security guards watching the silent, empty docks of half-billion-dollar white elephants, at least for the next few years.
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