As a result of the improved outlook for domestic natural gas production, in 2011 Cameron LNG proposed adding natural gas liquefaction and export facilities to its existing terminal. The U.S. today has more than a 100-year supply of natural gas and exporting a small amount of liquefied natural gas (LNG) would create U.S. jobs and provide economic benefits to the nation.
The liquefaction project will use Cameron LNG's existing facilities, including two marine berths capable of accommodating Q-Flex sized LNG ships, three LNG storage tanks with a combined storage capacity of 480,000 cubic meters, and vaporization capability for regasification services of 1.5 billion cubic feet (Bcf) per day. The anticipated incremental investment is estimated to be $6 to $7 billion, the majority of which will be project-financed and the balance provided by the project partners in a joint-venture arrangement.
The completed liquefaction facility will be comprised of three liquefaction trains with a nameplate of 4.5 million tonnes per annum (Mtpa) of capacity each, 13.5 Mtpa total. In addition, a new 21-mile natural gas pipeline, a compressor station and modifications to existing pipeline interconnections are proposed (read more here). Construction on the project is planned to start in 2014 with the facility expected to begin delivering LNG to international markets in 2017.
The new facilities will be wholly owned by Cameron, which in turn, will be wholly owned by Cameron LNG Holdings, LLC. Cameron LNG Holdings, LLC will be 50.2 per cent indirectly owned by Sempra Energy (Sempra) with GDF SUEZ S.A. (GDF SUEZ), Japan LNG Investment, LLC (a joint venture entity that has been formed by subsidiaries of Nippon Yusen Kabushiki Kaisha (NYK) and Mitsubishi Corporation (Mitsubishi)) and Mitsui & Co., Ltd. (Mitsui) each owning a further 16.6 per cent.
Cameron LNG obtained approval from the U.S. Department of Energy (DOE) to export up to 12 Mtpa, or approximately 1.7 Bcf per day, of domestically produced LNG to all current and future Free Trade Agreement countries and has an application pending before the DOE to export LNG to non-Free Trade Agreement countries, including those in Europe and Asia.
With an estimated capital cost of $6 to $7 billion, and an annual LNG exports averaging $8.6 billion, many benefits—both locally and regionally—will result from the construction and operation of the Cameron LNG liquefaction facilities, including:
Jobs: The design, engineering and construction of the project will result in the creation of an average of more than 1,300 on-site engineering and construction jobs over a four-year period. During the peak 12-month period, approximately 3,000 jobs will be directly created, as well as hundreds of additional off-site jobs to support the design, fabrication and construction of the facilities.
Economic: Cameron LNG estimates that the liquefaction project customers will export an average of approximately $8.6 billion of LNG per year, and oil and natural gas liquids production is expected to average $2.2 billion—averaging total trade balance benefits of $10.8 billion per year based on 2011 dollars.
Environmental: The export of LNG from the U.S. provides consuming nations with access to low-carbon natural gas. Locally, Cameron LNG will invest time and resources restoring wetlands that serve as habitat for native birds and plants.
Project Support: The project has strong support from the community, both current U.S. Senators, the Governor of Louisiana, the region's state and local officials and other community leaders.
Affiliates of Sempra Energy, GDF SUEZ S.A., Mitsubishi Corporation (through a related company jointly established with Nippon Yusen Kabushiki Kaisha) and Mitsui & Co., Ltd. signed a joint venture agreement to support the development, financing and construction of the liquefaction facility.
Cameron LNG signed 20-year tolling agreements with GDF SUEZ S.A. and affiliates of Mitsubishi Corporation and Mitsui & Co., Ltd. for the facility's liquefaction capacity.
Cameron LNG awarded an engineering services contract to Foster Wheeler AG for project development, front-end engineering design to support permit applications to the Federal Energy Regualtory Commision (FERC) and support for engineering and construction contracting. In January 2013, Cameron LNG initiated a tender process for the engineering, procurement and construction contract for the project and expects to award the contract in late 2013.
Also early in 2013, the financing process was initiated with the Japan Bank for International Cooperation, Nippon Export and Investment Insurance, and commercial banks. Cameron LNG expects to secure financing commitments for the project by early 2014.
Cameron LNG obtained approval from the DOE to export up to 12 Mtpa, or approximately 1.7 billion cubic feet (Bcf) per day, of domestically LNG to all current and future Free Trade Agreement countries. The DOE has approved Cameron LNG's free trade agreement permit and has received our request for a non-Free Trade Agreement permit.
The DOE hired NERA Economic Consulting to conduct a study on the benefits of exporting natural gas from the U.S. The study was completed on December 3, 2012, and concluded that increased LNG exports will result in net economic benefits to the U.S. economy. Public comments were received on January 24, 2013 and reply comments were issued on February 25, 2013. The DOE has indicated it will use the study and the public comments to help evaluate the non-Free Trade Agreement applications.
Cameron LNG initiated the pre-filing process with the Federal Energy Regulatory Commission (FERC) in April 2012, and filed its formal application in December 2012 for approval to construct the new facilities. A separate application was also filed for the new 21-mile natural gas pipeline, compressor station and modifications to existing pipeline interconnections.
FERC issued a notice of its schedule for the environmental review on April 4, 2013. Based on the published schedule, the final Environmental Impact Statement (EIS) is expected to be released in November 2013 and the final application should be approved in early 2014. Construction is expected to begin in 2014 with operations to commence in 2017.
Additional permits required for the project include: an air-quality permit from the Louisiana Department of Environmental Quality, a Coastal Use permit from the Louisiana Department of Natural Resources and a U.S. Army Corps of Engineers permit.
|November 2011||Commencement of Front End Engineering Design|
|January 2012||Cameron LNG received approval from the Department of Energy (DOE) to export up to 12 MTPA of domestically produced LNG from the Cameron LNG terminal to all current and future Free Trade Agreement countries.|
|April 2012||Submit request to FERC to initiate pre-filing review process|
|December 2012||Filing of NGA Section 3 application to FERC|
|November 2013||Issuance by FERC of NEPA document|
|Early 2014||Issuance of Section 3 authorization by FERC|
|Second Half 2017||Commence operations (1st Train)|
|Second Half 2018||Project completion|
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