In the last half decade, the United States, once a net importer of natural gas, is now on the threshold of becoming a major exporter of liquefied natural gas (LNG). In the early part of the 21st century, companies began building LNG import terminals in advance of an expected decline in natural gas production.

What was once seen as a strong investment began to sour as unconventional natural gas producers started to unlock the vast amounts of shale gas reserves in North America. While the first of these shale plays to reach production in the U.S., the Barnett shale in the Fort Worth basin, was considered to be a source of incremental volumes of the country’s gas supplies, it was anticipated that the majority would be coming from LNG imports.

However, in the years since the advent of the Barnett shale, the need for LNG imports has dissipated as shale production has exploded from the likes of the Haynesville, Fayetteville, Eagle Ford, Marcellus and Bakken shales.

Production out of these plays was brought on so quickly, with reserve levels so high, that they have not only been able to meet domestic demand but, in fact, they have overwhelmed this demand to the point where natural gas prices have fallen more than 75% since 2008.

Meanwhile, LNG prices have much higher values than domestic gas prices, especially in the wake of the 2011 Fukushima disaster in Japan. As Japan shutters its nuclear power program, its demand for LNG will continue to rise.

The price discrepancy has potentially given new life to the expensive LNG terminals that have been constructed in recent years and gone largely unused as the owners of these facilities have been seeking permission to export LNG volumes from the U.S. to more lucrative foreign markets.

Cheniere Energy’s Sabine Pass terminal was the first terminal to receive permission from the Federal Energy Regulatory Commission (FERC) and the U.S. Department of Energy (DOE) to export up to 803 billion cubic feet (Bcf) per year—2.2 Bcf per day— of domestically produced LNG volumes to countries both with and without Free Trade Agreements (FTA) with the U.S. The company stated that it could be ready to export these volumes as early as 2015.

It has since submitted two more applications to export 280 million cubic feet (MMcf) per day and 240 MMcf per day of LNG to both FTA and non-FTA countries. The two licenses for FTA exports were approved in July 2013. The company is seeking approval to export another 860 MMcf per day of LNG to both FTA and non-FTA countries as well.

Twenty other terminals have received DOE approval to export LNG to FTA countries. The majority of these applications are also seeking to export volumes to non-FTA countries. These projects include:

  • Freeport LNG, which received approval for two applications in February 2011 and February 2012 to export 1.4 Bcf per day to FTA countries. In May 2013, the company received approval to export this same capacity to non-FTA countries. The company has a second application to export volumes to non-FTA countries that is still pending. This project is expected to take three to four years to complete and could be brought online in early 2017;
  • Southern Union’s Trunkline LNG in Lake Charles, Louisiana, was approved in July 2011 to export 2 Bcf per day of LNG to FTA countries. The terminal was granted approval to export these same volumes to non-FTA countries in August 2013. The company said that construction could start in 2014 with the terminal being functional for exporting by 2018;
  • Carib Energy received approval in June 2011 to export 300,000 cubic feet per day of LNG from Florida and the Gulf Coast via ISO containers to FTA countries. The company also received approval in Sept. 2014 to export 400,000 cubic feet per day of LNG to non-FTA countries via ISO containers;
  • Dominon’s Cove Point LNG terminal on the Chesapeake Bay in Maryland received authorization in October 2011 to export 1 Bcf per day. The company received approval to export 770 MMcf per day of LNG to non-FTA countries on September 11, 2013;
  • Jordan Cove Energy Project received permission in Dec. 2011 to export 1.2 Bcf per day of LNG to FTA countries from a terminal that will be built in Coos County, Oregon. It also received permision in March 2014 to export 800 MMcf per day to non-FTA countries;
  • Sempra’s Cameron LNG received permission from the DOE in January 2012 to export 1.7 Bcf per day from Hackberry, Louisiana, to FTA countries. The terminal was later approved to export the same volumes to non-FTA countries in February 2014. The company stated that it intends to start construction on the project in late 2013 and begin operations in late 2016;
  • Gulf Coast LNG Export announced plans to build an export terminal in Brownsville, Texas, that will be capable of exporting up to 2.8 Bcf per day. The company is owned by Freeport LNG’s chief executive Michael Smith. It received approval to export to FTA countries in Oct. 2012 and is pending approval to export to non-FTA countries;
  • Gulf LNG Liquefaction Company received permission from the DOE in June 2012 to export 1.5 Bcf per day of LNG from its terminal in Pascagoula, Mississippi. It is seeking permission to export the same volume to non-FTA countries;
  • Oregon LNG anticipates completing work on its terminal in Warrenton, Oregon, in 2017. It received DOE approval to export 1.25 Bcf per day to FTA countries;
  • SB Power Solutions received DOE permission in June 2012 to transport 700,000 cubic feet per day of LNG from the Atlantic Coast to the Gulf Coast and on to FTA countries. It is not seeking a license to export to non-FTA countries;
  • Southern LNG Company received DOE approval in June 2012 to export 500 MMcf per day of LNG from its terminal on Elba Island in Georgia, to FTA countries. It is seeking permission to export the same amoun to non-FTA countries;
  • Excelerate Liquefaction Solutions I was granted a permit in August 2012 to export 1.38 Bcf per day of LNG from a terminal it is planning to build in Calhoun County, Texas, to FTA countries. It is seeking permission to export the same amount to non-FTA countries;
  • Golden Pass LNG terminal owned by ExxonMobil and Qatar Petroleum International received DOE approval in September 2012 to export 2.0 Bcf per day of LNG to FTA countries.It is seeking permission to export the same amount to non-FTA countries;
  • Cheniere Marketing LLC received approval to export 2.1 Bcf per day of LNG from its proposed Corpus Christi terminal to FTA countries in October 2012. It is seeking permission to export the same amount to non-FTA countries;
  • Main Pass Energy Hub LLC received approval in January 2013 to export up to 3.2 Bcf per day of LNG from its proposed deepwater LNG terminal off the coast of Louisiana to FTA countries. It has not applied to export volumes to non-FTA countries. Freeport-McMoRan Energy received approval in May 2013 to export 3.22 Bcf per day of LNG to FTA countries from the terminal and is seeking to export the same volumes to non-FTA countries;
  • CE FLNG received approval in to export 1.07 Bcf per day of LNG to FTA countries from its proposed Plaquemines Parish, Louisiana terminal in November 2012. It is seeking permission to export the same amount to non-FTA countries;
  • Waller LNG Services received approval in December 2012 to export up to 161 MMcf per day to FTA countries from its proposed terminal in Cameron Parish, Louisiana. It is seeking permission to export 190 MMcf/d to non-FTA countries;
  • Pangea LNG Holdings received approval in November 2012 to export up to 1.09 Bcf per day of LNG to FTA countries from its proposed South Texas LNG project in the Port of Corpus Christi in Ingleside, Texas. It is seeking permission to export the same amount to non-FTA countries;
  • Magnoia LNG received approval in February 2013 to export 540 MMcf per day of LNG from its proposed terminal in Lake Charles, Louisiana to FTA countries. It is not seeking a license to export volumes to non-FTA countries;
  • Gasfin Development USA received approval in March 2013 to export 200 MMcf per day of LNG from its proposed mid-scale terminal in Cameron Parish, Louisiana to FTA countries. It is seeking permission to export the same amount to non-FTA countries;
  • Venture Global LNG received permission in August 2013 to export 670 MMcf per day of LNG from its proposed terminal in Cameron, La. to FTA countries. It is also seeking to export the same amount to non-FTA countries;
  • Advanced Energy Solutions received permission in August 2013 to export 20 MMcf per day of LNG from the proposed Floridian Natural Gas Storage LNG facilities in the Port of Palm Beach, Fla. to FTA countries. It is not seeking a non-FTA license;
  • Argent Marine Management was approved in August 2013 to export 10 MMcf per day of LNG to FTA countries from the Pivotal LNG facility in Trussville, Ala. via ISO containers. It is not seeking a non-FTA export license; and
  • EOS LNG received approval in August 2013 to export 1.6 Bcf per day of LNG to FTA countries from its proposed terminal in the Port of Brownsville, Texas facility. It is also seeking to export the same volumes to non-FTA countries.

In addition Alturas LLC, Strom Inc. and SCT&E LNG LLC are seeking licenses to export volumes to FTA countries, while Texas LNG, Louisiana LNG Energy, Strom Inc. and SCT&E LNG LLC are seeking licenes to export to non-FTA countries. We will continue to update you on the status of these and other U.S. LNG export projects and will update this section regularly on MidstreamBusiness.com.

Contact the author, Frank Nieto, at fnieto@hartenergy.com