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US approves two LNG export projects

US approves two LNG export projects
Breaking a logjam, the US Energy Department has cleared two projects to export LNG to countries without a Free Trade Agreement with the US.

The first project anticipates sending up to 1.7bn cu ft per day (bcf/d), equalling 12m tons per year, from Cameron LNG's facility at Hackberry, Louisiana on the Gulf of Mexico.

The second project anticipates Carib Energy's movement of 40 million bcf/d from a proposed liquefaction facility in Martin County, Florida to countries in the Caribbean, Central and South America. Carib is a subsidiary of Jacksonville-based, Crowley Maritime Corp. The LNG would move in 40-foot containers, and operations could begin later this year.

Crowley reportedly has a multi-year contract with Coca-Cola Bottling Co. of Puerto Rico to supply the containerised
shipments.

The larger Cameron project involves a diverse group of investors, led by San Diego-based Sempra Energy, which has an indirect ownership of 50.2%. Other partners include Japanese shipping company NYK, France's GDF Suez, Mitsubishi Corp. and Mitsui.

Construction of the LNG facility with three trains will cost an estimated $10bn, with the start of operations due in 2018. The project includes a 21-mile, 42-inch natural gas pipeline. The site was originally chosen for a terminal to import liquid petroleum gases, and then expanded to vaporize inbound LNG imports. That was before the onset of domestic fracking to develop less expensive fuel supplies.

The timing of the announcement came with political overtones in advance of the November elections. Republicans have criticized the Obama Administration for holding up final approval on a long list of LNG export proposals. On the other side, chemical companies and other users of natural gas have argued that exports will raise the domestic price.

The pace of LNG project approvals has become an issue in the campaign of Mary Landrieu, D-La, to keep her Senate seat. She has pressed regulators for action. Her Republican challenger, Bill Cassidy, said that there are still too many other proposals awaiting approval.

In all, the Energy Department has now give full clearance to exports of 4.5 bcf/d to countries including those without a Free Trade Agreement, including Taiwan, Japan and others. This compares with an Energy Information Administration forecast of approximately 75 bcf/d in 2014.

Already confirmed is the Cheniere project at Sabine Pass, now nearing completion for a 2015 start-up. Another project, the Freeport LNG terminal at Quintana Island, holds a conditional export license.

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