ChevronTexaco moving ahead on second North American LNG terminal

Kristen Nelson

Petroleum News Editor-in-Chief

ChevronTexaco has projects under way to bring liquefied natural gas to both East and West coasts of North America.

The company said Nov. 17 that it has received federal approval to build an offshore liquefied natural gas receiving terminal some 40 miles off the Louisiana coastline in the Gulf of Mexico. Oct. 30, it said it was applying for Mexican permits for an LNG receiving facility some eight miles off the coast of Baja California, Mexico.

A ChevronTexaco subsidiary, Port Pelican LLC, has received approval for a deepwater port license from the Maritime Administration of the U.S. Department of Transportation. The license allows the company to construct, own and operate an offshore LNG receiving and regasification terminal off the Louisiana coast.

Both the Port Pelican and Baja California facilities are planned as freestanding concrete gravity based structures, with mechanical regasification facilities. The Port Pelican project, which would be the first deepwater port built in the United States since the 1976 Louisiana offshore oil port, will be the first natural gas deepwater port in the world.

Port Pelican includes an LNG ship receiving terminal, LNG storage and regasification facilities and a pipeline connection to existing offshore infrastructure which would deliver gas to the U.S. interstate gas pipeline network via the Henry Hub.

The facilities would be capable of handling 1.6 billion standard cubic feet of gas per day, with construction expected to begin in 2004 and project commissioning in 2007, followed by start-up operations.

The facility offshore Baja California would be much smaller, with initial processing estimated at 700 million standard cubic feet of gas per day. Permits have been filed for that project with the Mexican government, and ChevronTexaco said it expects to begin construction in 2004, with commissioning and start-up operations in the fourth quarter of 2007.

ChevronTexaco signed a memorandum of understanding with the Gorgon joint venture this summer. Gorgon, an offshore natural gas project in Australia in which ChevronTexaco is a partner, agreed to supply the company with approximately 2 million tones of LNG annually for delivery to North America over a 20-year period.

“The Baja California proposal will allow the company to commercialize natural gas resources, such as the world-class Gorgon gas field in Australia…,” John Gass, president of ChevronTexaco Global Gas, said in an Oct. 30 statement.

“Port Pelican is a key element of our LNG strategy and provides a viable solution to commercialize our large natural gas resources,” Gass said Nov. 17, but the company did not specify an LNG source for the Pelican development.

ChevronTexaco spokeswoman Nicole Hodgson told Petroleum News Nov. 18 that the company is implementing its Port Pelican commercial plan, “which includes negotiations for LNG supply.”

Hodgson said there are upstream liquefaction plants in existence or proposed “at various locations throughout the Atlantic basin which could supply LNG to Port Pelican. At this stage we have no further details.”

ChevronTexaco said in October that it has awarded major contracts for the Port Pelican and Baja California projects to Aker Kvaerner and Fluor for front-end engineering design and to perform engineering, procurement and construction management with the construction contract expected to be awarded in the first half of 2004.