Pangea seeks approval for natural gas export plant in Texas

Pangea LNG Holdings on Thursday announced it is seeking to build a plant in south Texas that would liquefy natural gas and sell it overseas, joining a flurry of firms asking the government for approval to export the fossil fuel.

The company is asking the Energy Department’s approval to export up to 8 million metric tons per year of liquefied natural gas from the site, which would be located on the La Quinta Ship Channel, part of the Corpus Christi port.

If it wins regulatory approvals, Pangea officials said the planned South Texas LNG Export project could be online by 2018.

The facility would be located on a 550-acre site in the city of Ingleside; the company plans to connect it to transmission pipelines in the region. It could join a host of other planned liquefaction facilities along the Texas and Louisiana coasts, including plants that originally were built to receive tanker shipments of liquefied natural gas, before the current domestic drilling boom.

“We expect there to be several successful LNG export projects on the Texas coast in the coming years because of the large new natural gas reserves in North America,” said Pangea CEO Kathleen Eisbrenner in a statement.

But those projects must clear a raft of regulatory approvals and fresh scrutiny from the Obama administration, which is struggling to decide whether _ and how much _ of the United States’ natural gas bounty should be sold overseas.

The Energy Department has postponed decisions on companies’ applications to export more than 16 billion cubic feet of liquefied natural gas daily until it received a study of the economic effects of that move later this year. Obama administration officials are wary of an export strategy that could bump up natural gas costs for American consumers and throttle a resurgence in domestic manufacturing spurred by relatively low prices for the fossil fuel.

The Federal Energy Regulatory Commission would weigh whether to approve Pangea’s liquefaction facility, but the Energy Department would vet the company’s proposed exports.

The United States already exports some natural gas to some of the country’s free trade partners, including Brazil, Canada and Mexico. But export advocates say there isn’t enough of a market in those nations to keep planned liquefaction terminals humming.

While federal law generally requires automatic approval of natural gas exports to the free trade partners, the Energy Department is tasked with reviewing proposals to sell natural gas to other nations on a case-by-case basis.

Pangea is seeking to send liquefied natural gas to the United States’ free trade partners as well as other countries.

In particular, natural gas producers have their eyes on Asian markets, including Japan, where the fossil fuel can command three to five times its U.S. price.

Federal regulators recently approved Houston-based Cheniere Energy’s plans to begin exporting LNG from its Sabine Pass terminal in southwest Louisiana.

Other U.S. companies looking to export natural gas include Dominion and Southern Co. Texas-based Freeport LNG has begun an application to build a liquefaction facility that could export 1.4 billion cubic feet per day.

While most of the companies pursuing export licenses want to convert existing terminals for receiving natural gas imports, others such as Pangea plan entirely new facilities.

The liquefaction process involves cooling natural gas to 256 degrees below zero, which transforms it into a liquid that can be transported by tanker ships and later converted back to gas at its destination.