Gulf Coast LNG Terminal Construction Continues

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Researched by Industrial Info Resources (Sugar Land, Texas). Currently, there is only one operational LNG receiving and regasification terminal located onshore in the U.S. Gulf Coast region. Owned by Trunkline LNG Company LLC (Houston, Texas) and located in Lake Charles, Louisiana, the terminal has a daily natural gas send out capacity of 1.8 Bcf/d and a peak send out capacity of 2.1 Bcf/d, representing 43% of the total LNG regasification capacity of the U.S. Trunkline LNG recently completed phase IIa and IIb expansions, essentially doubling the size of the facility, and there is early talk of a 1.2 Bcf/d capacity expansion phase III after Trunkline completes a $250 million IEP (Infrastructure Expansion Project) some time in late 2008. Trunkline has awarded the E+P+C/M contract for the IEP project to Mustang Engineering LP (Houston, Texas).

Presently, there are four new LNG terminals currently under construction in North America and three of those are located on the Gulf Coast. These three projects have a combined capital value of $2.17 billion and a total regasification capacity of approximately 5.6 Bcf/d. Sempra LNG (San Diego, California), Cheniere Energy Incorporated (Houston, Texas), and Freeport LNG Development LP (Houston, Texas) are constructing these three terminals, and the completion timeline for all three terminals is scheduled for the first quarter of 2008.

Freeport LNG Development LP is constructing a 1.5 Bcf/d capacity LNG terminal in Brazoria County, Texas, at an estimated capital cost of $650 million. In Cameron Parish, Louisiana, both Sempra LNG & Cheniere Energy are constructing new LNG terminals at a combined capital cost of over $1.6 billion and capacities of 1.5 Bcf/d and 2.6 Bcf/d respectively.

All three projects currently under construction have second phase expansion plans. All of the second phase projects are projected to enter service between 2009 and late 2010 and will bring an additional 5.55 Bcf/d of capacity online. Approximately, $1.2 billion in capital will be required to being all of these LNG projects into operation. By far the larger of the second phase expansions is Freeport LNG Development’s second phase, which will add an additional 2.5 Bcf/d of regasification capacity at its Freeport, Texas, terminal.

Looking beyond the terminals currently under construction on the Gulf Coast, there is a massive amount of investment being considered in the LNG sector. As of January 2007, a total of 27 LNG related projects worth an estimated $8.8 billion are still scheduled to begin construction on the Gulf Coast. Fourteen of these planned projects are new LNG receiving terminals and include the above mentioned phase II expansions to the three LNG terminals currently under construction on the Gulf Coast and carry an estimated capital value of $7.4 billion. The remaining 13 projects totaling $1.37 billion in value are associated natural gas pipelines that will be needed to connect the projects to the pipeline grid.

The LNG projects will be spread disproportionately across the Gulf Coast states with seven in Louisiana, five in Texas, and one in each of Mississippi and Alabama. Texas and Louisiana have the lion’s share of the proposed spending with $3.6 billion and $2.7 billion respectively. The two Gulf Coast counties that have the largest share of the proposed LNG terminal spending are Cameron Parish, Louisiana, with $2.6 billion and Jefferson County, Texas, with $1.57 billion.

Of course, not all of these terminals will be constructed, but several of these LNG proposals will make it all the way to completion. The main players involved in the development of LNG terminals on the Gulf Coast are Cheniere Energy Incorporated, Sempra LNG, ExxonMobil, Chevron, ConocoPhillips, Shell US Gas & Power LLC, Freeport LNG Development LP, Freeport-McMoRan Development LP, Occidental Energy Ventures Incorporated, Trunkline LNG Company LLC, Gulf LNG Energy LLC, Calhoun LNG LP, and TORP Technology Incorporated.

For more information on LNG development trends in the U.S. Gulf Coast Region, listen to Ed Lewis, CEO of Industrial Info discuss this topic and more on Industry Today, simulcast on KNTH 1070 AM Houston this Saturday. For details: Focus on Key Industries of the Gulf Coast with Ed Lewis, President & CEO of Industrial Info, a Special Feature of Industry Today on KNTH 1070 AM Houston .

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