Golden Pass Products LLC (Golden Pass) has submitted an application to the U.S. Department of Energy (DOE) to export liquefied natural gas (LNG) from the Golden Pass LNG receiving terminal at Sabine Pass.
The proposed project involves construction of natural gas liquefaction and export capabilities at the existing Golden Pass LNG facility. A final investment decision will be made following government and regulatory approvals.
If developed, the project would represent about $10 billion of investment on the U.S. Gulf Coast, generating billions of dollars of economic growth at local, state and national levels and millions of dollars in taxes to local, state and federal governments. The project would generate approximately 9,000 construction jobs over five years with peak construction employment reaching about 3,000 jobs.
The proposed project would have the capacity to send out about 15.6 million tons of LNG per year. New infrastructure required to export will be located on the existing property, which currently contains two berths for LNG tankers, five storage tanks and access to the Golden Pass pipeline. The expanded facility would then have the capability and flexibility to both import and export natural gas.
The proposed expansion of Golden Pass is an opportunity to capitalize on America’s abundant natural gas resources. The Energy Information Administration’s Annual Energy Outlook 2012 shows that the United States has substantial gas supplies that can support gas exports, including LNG exports, over the longer term.
The application filed with the DOE is to export natural gas to nations that have existing free trade agreements (FTA) with the United States. A similar application is planned for non-FTA countries.
The expansion, Golden Pass Products, is a partnership of Qatar Petroleum International and ExxonMobil affiliates. The experience of its two partners provides Golden Pass Products market-leading project development skills and technical expertise that would allow the company to construct a world-class liquefaction and export facility in the United States.
This proposed expansion is taking place in a changing energy market. The abundance of natural gas in the U.S. is revolutionizing the scale and future of domestic energy development. Because of its abundant supply and world-class industry capability and infrastructure, the U.S. has the opportunity to capture significant economic benefits by expanding domestic and international markets for natural gas. LNG exports will help maintain a robust domestic U.S. gas production industry.
Company officials noted this project would create an opportunity to adapt an existing business to the changing demands of the global market, capture benefits in the U.S. through jobs and investment and deliver an abundant energy resource to our trade partners. LNG exports are consistent with U.S. efforts to expand international trade and reduce barriers to trade. The U.S. is already an exporter of many commodities and energy products, including wheat and coal. The company believes the freedom to import and export goods and services benefits Americans in the form of more choices, more value, more wealth and more jobs.
In announcing its application for this new project, the company cited demonstrated safety and environmental performance in the construction and operation of its existing Sabine Pass facility. The Golden Pass expansion project would be built and operated with the same unwavering commitment to safety as the existing facilities. Through construction of the existing facility, Golden Pass demonstrated an excellent safety record with more than 5 million work hours without a lost-time injury. Since operation, there have been zero lost-time injuries at the Golden Pass employee base. Golden Pass is an excellent environmental steward, with zero water discharge or air violations. The expansion project would be built on the existing industrial footprint, minimizing environmental and community effects.
The U.S. government, through the Department of Energy and the Federal Energy Regulatory Commission, utilizes a rigorous application and permitting process for LNG export projects. DOE evaluates several criteria, such as energy security and price implications, in order to determine if an LNG export project would be in the public interest. FERC ensures the safe operation and reliability of proposed and operating LNG terminals.
Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at setxbiz.blogspot.com or e-mail james [at] beaumontbusinessjournal [dot] com.