• 2 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 4 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 6 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 7 hours Schlumberger Warns Of Moderating Investment In North America
  • 8 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 9 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 10 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 12 hours New Video Game Targets Oil Infrastructure
  • 13 hours Shell Restarts Bonny Light Exports
  • 15 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 21 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 1 day London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

Kobe Steel Scandal Could Rattle Nuclear Industry

The scandal at Japan’s Kobe…

Alt Text

The U.S. Shale Play To Watch In 2018

The original U.S. shale gas…

Alt Text

Russia And China Continue To Boost Oil Ties

The Russia-China alliance is strengthening…

Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

More Info

DOE Approves Sixth LNG Export Terminal

DOE Approves Sixth LNG Export Terminal

On February 11 the U.S. government gave a green light to Sempra Energy’s LNG export terminal in Louisiana. The approval is the sixth over the last year. Sempra’s Cameron project on the Gulf Coast calls for the export of 1.7 billion cubic feet (bcf) per day when completed, bringing the total approved export volume to 8.5 bcf per day. Sempra Energy’s stock price jumped 1% in midday trading.

The Cameron facility was originally constructed to receive imports of LNG, back when the U.S. thought it was running out of natural gas. The surge in shale gas production has many companies, including Sempra Energy, investing billions to turn around these facilities for export. Sempra Energy plans on putting in $6 to $7 billion to overhaul the facility with construction beginning in 2014. When completed in 2017, the Cameron terminal will consist of three liquefaction trains.

DOE’s approval was critical to the project moving forward. The U.S. government more or less automatically approves permits for LNG exports to countries with which the U.S. has a free-trade agreement. Non-FTA countries receive much greater scrutiny, with DOE weighing whether or not they are deemed to be in the “public interest.” Sempra Energy signed a 20-year deal with Japan’s Toho Gas Company to deliver LNG. The U.S. and Japan do not have a free-trade agreement.

Related Article: Consumers Paying More as Nat Gas Cash Prices Spike

Democratic Senator Mary Landrieu (LA) quickly released a press release touting the project’s benefits. “It waited more than two years for a DOE’s approval to continue expansion that benefits not only Louisiana, but also the nation’s economy. With this final approval from DOE, Sempra can complete its export facility.” Sen. Landrieu’s office also said the project will inject $10 billion into the local economy, creating 3,000 jobs in the process.

Her comments come at an auspicious time for proponents of liberalizing the nation’s fossil fuel export laws. On the same day of the Cameron approval, Sen. Landrieu took the helm of the Senate Energy Committee, where she will presumably preside over a push to not only open up the U.S. to more LNG exports, but also repeal limits on crude oil exports.

While there is opposition among certain industry groups, environmentalists, and consumer advocate organizations, the move to export LNG seems all but inevitable at this point. Although it is moving much too slow for the oil and gas industry, the administration has steadily doled out approvals for export facilities. There is little reason to believe there won’t be more in the offing. The Republican led House Energy and Commerce Committee released a report on February 4, 2014, calling on the Obama administration to accelerate the rate of approvals. Whereas the administration is treading much lighter with the higher profile Keystone XL project, the President apparently is not worried too much about blowback from the left on the LNG issue.

Related Article: Shale Boom Prompts Calls for Expanded US Oil and Gas Exports

But the industry feels time is of the essence. The first movers have locked in long-term contracts with their Asian customers, but Japan – which alone accounts for 40% of the LNG market – is aggressively moving to create a more liquid spot market. This will give greater leverage to buyers at the expense of producers. The Japanese Ministry of Economy, Trade and Industry (METI) wants to launch futures contracts for LNG by March 2015. METI will require Japanese LNG importers to report their prices, and by averaging them together, Japan will create a new benchmark spot price. It sees this as a step towards a full blown dollar-denominated futures market. If LNG trade becomes more liquid, oil-linked contracts will begin to disappear, and trade will move towards a much more global LNG market.

That means that U.S. exporters won’t be able to benefit from such a huge spread between the Asian spot price and the Henry Hub price. For this reason, the U.S. gas industry and their allies in Congress are pushing for a swifter DOE approval process.

By Nicholas Cunningham




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News