DOE Approves Natural Gas Export Facility

Mitsui and Mitsubishi of Japan, and GDF Suez of France have invested in a US liquefied natural gas (LNG) project following the Energy Department’s Friday decision to end a freeze on natural gas exports and conditionally approve a Texas LNG project.

The decision allows the Freeport LNG Terminal (pictured) on Quintana Island, Texas to export natural gas to countries that don’t have free trade agreements with the US at a rate of up to 1.4 billion cubic feet a day. The facility previously received approval to export LNG to free trade agreement countries. It still needs approval from the Federal Energy Regulatory Commission.

The project is partly owned by ConocoPhillips, Dow Chemical and Osaka Gas, Bloomberg reports.

Natural gas prices rose 5 percent compared to a week ago following the DOE’s decision, according to Bloomberg.

The DOE’s approval of unrestricted LNG exports from the Freeport export plant is the first such project approved in two years and only the second to win DOE approval to export gas to countries that don’t have free-trade agreements with the US. In 2011, the DOE authorized the Sabine Pass LNG Terminal in Cameron Parish, Louisiana to export LNG.

Also on Friday, three foreign companies signed agreements to invest up to $7 billion in a different LNG project in Louisiana, the New York Times reports. Sempra Energy is developing the facility at Hackberry, La.

The companies’ final decision will hinge on the project’s receiving necessary permits, GDF Suez tells the Times. The French Energy company predicts the plant will begin exporting LNG in 2017.

The National Association of Manufacturers said the Energy Department’s LNG decision is a good first step and encouraged the DOE to process additional LNG export licenses “in an expeditious fashion.” The manufacturers support free trade and open markets, NAM vice president of energy and resources policy Ross Eisenberg said on Friday. “However, it can only work if the government does not erect regulatory barriers that result in winners and losers.”

Last spring, the Sierra Club challenged Freeport LNG’s bid to export liquefied natural gas from the Quintana Island facility in a protest lodged with the DOE.