WASHINGTON — Sempra Energy nabbed a critical license to broadly export natural gas from its Hackberry, La. facility on Tuesday, marking the sixth such approval handed down by the Obama administration.
Although Sempra still needs to obtain other government permits before it can add exporting equipment to the Cameron LNG receiving terminal, the conditional export license issued by the Energy Department marks a major milestone in its quest to begin shipping liquefied natural gas overseas.
The Energy Department granted Sempra’s request for a 20-year license to export up to 1.7 billion cubic feet of natural gas per day to countries that do not have free-trade agreements with the United States.
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The Energy Department has now authorized companies to export up to 8.5 billion cubic feet per day of liquefied natural gas to non-free-trade partners, about 13 percent of current daily production.
Although federal law generally allows natural gas exports to countries that have free-trade agreements with the U.S., the level of scrutiny is slightly higher for non-free-trade partners. In those cases, the Energy Department must authorize natural gas exports unless it determines they are “not be consistent with the public interest.”
The Energy Department’s last approval went to Freeport LNG in November, well beyond administration officials’ suggestions of four to six weeks between export decisions. The longer timeline has fanned frustration among export boosters and fears that more delays are on the horizon.
Sempra’s Cameron LNG subsidiary operates the existing terminal along the Calcasieu Channel in Hackberry, which was originally built to receive tanker shipments of liquefied natural gas, before the current shale gas boom made those imports unnecessary.
The company is planning to build three trains capable of liquefying natural gas by super chilling it to 260 degrees below zero. The project also would involve building a new 21-mile natural gas pipeline and a compressor station.
Sempra owns 50.2 percent of Cameron LNG. its other partners are GDF Suez, Japan LNG Investment and Mitsui & Co.
Some lawmakers and manufacturers worry foreign sales of U.S. natural gas will drive prices too high for domestic consumers.
Energy Department officials promised they would “monitor any market developments and assess their impact” when reviewing individual applications, but they have not specified what data could trigger an analysis — or whether they would even take a formal pause to conduct it. Regulators did not take an official timeout after the government’s Energy Information Administration released oil and gas forecasts in December.
Export debate: LNG export critics call for time out
Meanwhile, export boosters have said the slow pace of export approvals could prevent U.S. companies from winning the global competition to sell natural gas to Asian markets clamoring for the fossil fuel.
“This [Cameron LNG] facility alone promises a potential investment of over $4 billion, and each export approval strengthens our competitive position in the international market,” said Erik Milito, upstream director for the American Petroleum Institute.
Next up for review is the Jordan Cove Energy Project proposed for Coos Bay, Oregon, which wants to export 800 million cubic feet of natural gas per day to non-free-trade partners.
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