Freeport LNG will partner with Australian bank Macquarie to build the capacity to turn U.S. natural gas into a liquid for export overseas.
The terminal, which opened on the Texas coast in 2008 to import liquefied natural gas from other countries, has already added the capacity to resend some of that LNG back to sea following the recent glut of the fuel in the U.S.
But adding the capacity to turn U.S.-produced natural gas into a liquid reflects the depths of the country’s excess production:
Recent developments in shale gas technology have transformed the U.S. gas market. The U.S. has developed significant natural gas resources and is able to meet projected domestic demand with a surplus for a long time to come,” said Nicholas O’Kane, Senior Managing Director and Global Head of Macquarie Group’s Energy Markets Division.
“Exporting attractively priced gas as LNG from the U.S. will help encourage continued domestic production, balance global market dynamics and offer global buyers a stable, attractively priced fuel supply alternative.
The plans include building up to four units for superchilling natural gas into a liquid. The $2 billion project should be able to export up to 1.4 billion cubic feet per day of gas by 2015, the companies said.
Freeport LNG will operate the plant, with Macquarie contributing to development costs.
Macquarie and Freeport will jointly market half of the export plant’s capacity. The other half will be offered to Freeport’s existing import customers, Dow Chemical and ConocoPhillips.
Michael Smith, Freeport LNG’s Chairman and CEO, said the project could create more than 1,000 construction jobs over two or three years.
Earlier this year, Cheniere Energy announced plans to add liquefaction capacity on the site of its Sabine Pass import terminal on the Louisiana side of the waterway near Port Arthur, Texas. Cheniere also plans to produce and export LNG by 2015.
The U.K. took its first shipment of LNG from the U.S. in nearly 50 years this weekend when a tanker with LNG from Sabine Pass arrived at the Isle of Grain import terminal.
