LNG exports boost U.S. natural gas producers

Part 4
LNG exports boost U.S. natural gas producers (Part 4 of 5)

Must-know: Proposed liquefied natural gas facilities

Proposed LNG facilities

As of June 20, 2014, there are 13 projects pending approval from the Federal Energy Regulatory Commission (FERC). We’ve discussed some of these projects in the previous section and will in the next section as well.

FERC ProposedEnlarge Graph

Energy Transfer’s project

Energy Transfer Equity (ETE) and Energy Transfer Partners L.P. (ETP) are developing an liquefied natural gas (LNG) export project (Trunkline LNG) at ETP’s Lake Charles, Louisiana facility through a joint venture. It would have a capacity to produce 15 million metric tons of LNG for export. This project could be in service by mid-2019. With three liquefaction trains, BG Group will have exclusive rights to the export capacity. ETE has 3.1 billion cubic feet (bcf) per day demand charge agreement with BG for 25 years that starts in 2019. Recently, ETE filed an application with the FERC seeking authorizations for the proposed new liquefaction facilities and modifications to the existing terminal to facilitate the storage and subsequent export of LNG. ETE is the general partner of ETP, and owns limited partner ownership In ETP.

ETE's Export plansEnlarge Graph

Energy Transfer’s management views

Jamie Welch, the Director of ETP, said in the conference call of 1Q14 earnings, “we filed an application with the FERC, seeking authorization for the proposed new liquefaction facilities and modifications to Trunkline LNG existing terminal to facilitate the storage and subsequent export of LNG. As Martin also highlighted, Trunkline gas filed their certificate application for the modification expansion to accommodate the expected BGE gas volumes for the liquefaction project. Lastly TLNG filed an application with the FERC to covert the existing re-gas facilities from Section 7 which has open access to Section 3 status in conjunction with the liquefaction projects. These growth filings represent the culmination of significant front end engineering design efforts for the liquefaction project and pre-filing consultations with the FERC, other federal state and local agencies that have been underway since 2012. Approval of all of these applications have been requested from the FERC by April, 2015.”

Jordan Cove’s liquefied natural gas export project

Jordan CoveEnlarge Graph

Jordan Cove Energy Project L.P. has recently received Department of Energy (or DOE) approval for 30-year FTA (free-trade-agreement) export approval granted for nine metric tons per annum. On March 24, 2014, Jordan Cove received DOE approval for a 20-year non-FTA export application for six metric tons per annum. The company considers that the Coos Bay Port in Oregon is the best port for exports of high-value LNG to Asia Pacific markets.

Higher LNG exports would be positive for the energy companies active in the business of liquefaction of natural gas. Government regulatory approvals for LNG exports have benefited companies like Sempra Energy (SRE) and Cheniere Energy Inc. (LNG). Energy Transfer Partners (ETP), El Paso Pipeline Partners (EPB), Dominion Energy (D), and Exxon Mobil (XOM) are some of the other companies that will also benefit if their pending applications are approved by the DOE and FERC. SRE is a component of the Utilities Select Sector SPDR (XLU) and Cheniere Energy is a part of the Vanguard Energy ETF (VDE). EPB is a component of the MLP ETF (MLPA).

The Realist Discussions