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McMoRan’s energy hub step closer to reality Company applies for license to build $440 million LNG terminal offshore Louisiana; plans to store gas in deep salt caverns Ray Tyson Petroleum News Houston Correspondent
The cornerstone of McMoRan Exploration’s long-envisioned Main Pass Energy Hub offshore Louisiana has moved a step closer to reality with submission of an application to license an LNG receiving terminal offshore Louisiana.
The license application was submitted by McMoRan subsidiary Freeport-McMoRan LLC, and is now pending acceptance by the U.S. Coast Guard, the company said March 1. That would give McMoRan the green light to arrange financing for development of a $440 million LNG facility capable of receiving and conditioning an initial 1 billion cubic feet per day of liquefied natural gas for U.S. markets.
“The submission of this application is an important milestone for the development of our Main Pass Energy Hub, which would provide a gateway for required LNG imports into the U.S. natural gas distribution system,” McMoRan co-Chairmen James Moffett and Richard Adkerson said in a joint statement.
As U.S demand for natural gas grows and domestic supply shrinks, a number of companies have stepped up to the plate and applied for licenses to build LNG import terminals either in the Gulf of Mexico or along the Gulf Coast. Salt domes would be developed for storage McMoRan’s proposal differs in that additional investment is planned to develop massive salt domes that lie at the LNG site beneath the ocean floor to separately store natural gas. The two-mile diameter caverns would initially include 28 billion cubic feet of storage space, McMoRan said.
“The ability to offer significant natural gas storage ... offers excellent opportunities to achieve added value for LNG imports and provides security of supply and peaking capabilities for downstream customers,” the company explained, adding that the energy hub would be capable of delivering a combined 2.5 bcf per day, including gas from storage. Additionally, McMoRan said it is planning to invest in natural gas and pipeline interconnects to the U.S. pipeline distribution system. Existing infrastructure to be used in project McMoRan also intends to use “the substantial existing platforms and infrastructure” already at the site for the energy hub, which the company said would reduce construction time and deliver cost savings. The facility could be in operation by late 2007, making it among the first offshore LNG facilities in the United States, McMoRan said.
The Main Pass Energy Hub, 37 miles east of Venice, La., will be at Main Pass Block 299 in 210 feet of water, which would allow deepwater access for large LNG tankers, McMoRan said. The facility also would be in close proximity to shipping channels along the Gulf Coast.
McMoRan’s LNG application has been filed under the U.S. Deepwater Port Act, which was amended in 2002 to include deepwater gas ports. It requires up to a yearlong review period before a license can be issued. Nevertheless, “we are encouraged by the streamlined permitting process ... and recent approvals of other offshore projects,” the company said.
McMoRan claims that its Main Pass Energy Hub would generate 18,000 jobs during the construction phase.
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