WASHINGTON — Sempra Energy won federal approval Thursday to build a facility for exporting natural gas in southwest Louisiana, becoming only the second such U.S. project to secure all major necessary federal permits.
The Federal Energy Regulatory Commission authorized Sempra’s Houston-based subsidiary Cameron LNG to add liquefaction equipment and related infrastructure to its existing natural gas import terminal along the Calcasieu Channel in Hackberry, La.
The $10 billion project already holds a conditional license from the Energy Department to export up to 1.7 billion cubic feet of natural gas per day to Taiwan, Japan and other countries that do not have free-trade agreements with the United States.
Although Cameron LNG will have to go back to the Energy Department one more time seeking to convert its conditional license into a full-fledged export permit, the conditional approval and the FERC authorization were the project’s biggest hurdles.
Debra Reed, Sempra’s CEO, called FERC’s authorization “another important step in delivering natural gas to America’s trading partners abroad.”
San Diego-based Sempra is set to own 50.2 percent of Cameron LNG. Other partners in Cameron LNG include companies that represent the entire range of the liquefied natural gas value chain, including shipping company Nippon Yusen Kabushiki Kaisha and France’s GDF Suez, as well as Mitsubishi Corp. and Mitsui.
Sempra LNG President Octavio M.C. Simoes said in a statement that the “important milestone” of FERC approval puts the project “one step closer to starting construction later this year.”
Cameron LNG has said it hopes to begin liquefaction operations as soon as 2017 and anticipates full commercial operation in 2019.
At least one customer is already under contract. Japan’s Kansai Electric Power Co. has agreed to buy 400,000 tons of LNG processed at Cameron’s facility for 20 years. And under a “heads of” agreement signed in March, Cameron LNG would deliver 800,000 tons per year of liquefied natural gas to Taiwan’s CPC Corp. for 20 years.
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Cameron is planning to build three trains capable of liquefying natural gas by chilling it to 260 degrees below zero. The FERC approval Thursday also would allow construction of a 21-mile, 42-inch natural gas pipeline, a new compressor station and other equipment.
The existing terminal, located 18 miles from the Gulf of Mexico, was originally built to receive shipments of liquefied petroleum gases. Equipment to vaporize liquefied natural gas was added by July 2009, even as a domestic drilling boom had U.S. producers clamoring to sell the fossil fuel into international markets.
Since 2012, Cameron LNG has been navigating a federal regulatory review process at the Energy Department and FERC. But the Energy Department is revamping its process for reviewing LNG export projects, with a proposed plan that would effectively prioritize those that are further along in their FERC reviews and viewed as closer to being commercially developed.
The Senate Energy and Natural Resources Committee is set to scrutinize that plan during a hearing Thursday afternoon.
Panel chairwoman Mary Landrieu, D-La., who has pushed federal regulators to approve Cameron LNG, cheered Thursday’s action.
“Cameron LNG will create thousands of high-paying jobs in Southwest Louisiana and will position America as an energy superpower,” Landrieu said. “The Department of Energy should follow FERC’s lead and issue the final approval for the project.”
Although dozens of U.S. projects are planned to export natural gas, only a handful of them are expected to fully permitted, financed and built inside the United States. Cameron LNG is one of just six projects that holds an Energy Department license authorizing exports to countries that are not U.S. free trade partners.
Only one of those is currently being built: Cheniere Energy’s facility in Sabine Pass, La., which expects to begin shipments next year.
Critics of Cameron LNG — including environmentalists who oppose the export projects because they would drive up demand for the fossil fuel — now have 30 days to ask FERC to reconsider its approval.
Kevin Book, managing director of ClearView Energy, predicted the Energy Department would not finalize Cameron’s export authority until after that rehearing process is closed. He noted that the Energy Department only lifted conditions on Cheniere’s Sabine Pass export license 12 days after FERC denied rehearing on its authorization of the project.