Gas

U.S. LNG moves pushing domestic fuel toward global power generation mix

Port Arthur LNG and the Polish Oil & Gas Company signed a definitive 20-year sale-and-purchase agreement for two Mtpa of LNG from the Port Arthur LNG project,

Recent regulatory milestones are pushing American natural gas closer to fueling more European and global power plants in the not too distant future.

Last week, California-based Sempra Energy announced that its Port Arthur LNG subsidiary received federal approval to build and operate its liquified natural gas export facility under development in Jefferson County, Texas. The Port Arthur LNG project is expected to include two liquefaction trains, three LNG storage tanks and the ability to export close to 11 million tonnes per year (Mtpa).

In December 2018, Port Arthur LNG and the Polish Oil & Gas Company signed a definitive 20-year sale-and-purchase agreement for two Mtpa of LNG from the Port Arthur LNG project, subject to certain conditions. Last year, Sempra LNG selected Bechtel as the engineering, procurement, construction and commissioning contractor for the project, subject to reaching a definitive agreement.

“With today’s FERC order and the commercial momentum of the Port Arthur LNG project, we are one step closer to reaching a final investment decision and delivering low-cost, reliable and clean U.S. natural gas to world markets,” said Carlos Ruiz Sacristà¡n, chairman and CEO of Sempra North American Infrastructure. “Port Arthur LNG should help us achieve our goal to become one of the largest exporters of North American liquefied natural gas (LNG). We are grateful to all of our stakeholders for supporting this important infrastructure project that is expected to create thousands of jobs and provide economic benefits for years to come.”

Port Arthur LNG received authorization from the Department of Energy (DOE) in August 2015 to export domestically produced natural gas to countries with which the U.S. has free trade agreements and has a pending application to export natural gas to non-free trade agreement countries.

Development of the Port Arthur LNG project is contingent upon obtaining additional customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing, incentives and other factors, and reaching a final investment decision.

In earlier LNG developments, Spanish electric utility Endesa and Indonesia’s PT Pertamina Persero entered into sale and purchase agreements (SPA) for the Corpus Christi LNG export facility owned by Cheniere Energy Inc.. First commercial delivery is expected by June.

Iberdrola, also based in Spain, signed the SPA for bridging volumes also expected to begin in June, according to the release.

Thanks in large part to the shale gas revolution happening in Texas, Louisiana, Pennsylvania and elsewhere, U.S. LNG exports quadrupled in 2017 and could be the majority of natural gas exporting by the early 2020s, according to the Energy Information Administration.

Japan imports three percent of its LNG from the U.S., and that number may grow in future years.

(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at 918-831-9177 and [email protected]).

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Natural gas infrastructure is part of the growing Knowledge Hubs being offered at the POWERGEN International conference and exhibition happening Nov. 19-21 in New Orleans.

 

 

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