Parallax Takes On Second Gulf Coast LNG Project With Louisiana Deal

Houston’s Parallax Energy has purchased Louisiana LNG Energy LLC, a private company working toward exports of billions of cubic feet (Bcf) of LNG annually.

Louisiana LNG had intended to transfer controlling interest to financial backer ArcLight Capital Partners LLC. Instead, Parallax has taken on its second Louisiana mid-scale natural gas liquefaction and export project.

Terms of the deal were not disclosed. In Parallax’s other LNG project, Live Oak LNG, the company has pledged $2 billion in investment to develop a liquefaction facility and LNG export terminal near Lake Charles, La.

Louisiana LNG, also based in Houston, is being developed in Plaquemines Parish, La., on the east bank of the Mississippi River between New Orleans and Venice, La.

The company applied to the Office of Fossil Energy (FE) of the Department of Energy (DOE) on Feb. 18, 2014, to export about 97 Bcf per year or about two million metric tons (MMtpa) of LNG. Permits were filed to export LNG to Free Trade Agreement (FTA) and non-FTA countries.

The start-up date is anticipated for late 2019, said Martin J. Houston, Parallax chairman and founding partner. Houston is former COO and executive director of BG Group Plc, where he led efforts to create that company’s world-leading LNG business.

“The addition of Louisiana LNG to our company sets the Parallax strategy firmly into motion,” he said. “We have an innovative, efficient and cost effective way to safely produce what customers want—smaller amounts of LNG that they can purchase incrementally.”

Houston said one of Parallax’s core tenets is to design once and build many times.

“Louisiana LNG has a great head start and we are fortunate they selected the same technology and world class partners,” Martin said. “We will be working with Bechtel on pre-engineering design and Chart for process design for both Louisiana LNG and Live Oak LNG. In addition, both projects have great locations with excellent pipeline supply and deep water access.”

In its application, Louisiana LNG said its liquefaction facility would consist of four 74,380 Mcf/d liquefaction trains with an annual capacity of about 100 Bcf of LNG.

Two amine and dehydration units would be added upstream of the four liquefaction trains to remove residual moisture, CO2 and NGL. The liquefaction facility was to be built in a modular fashion and assembled on-site.

The company requested authorization to export 97 Bcf per year of domestically-produced LNG for a 25-year period.

The company also planned to construct a 2.3-mile, 24-inch pipeline to connect with the High Point Gas Transmission interstate pipeline system, its application said.

Parallax is developing global LNG projects and said it has expertise in every aspect of the LNG chain from upstream gas supply, trading, liquefaction to shipping and marketing. The company is based in Houston.

ArcLight, which said it would fund Louisiana LNG in May 2014, did not respond to a request for comment.

LNG Exports

Louisiana LNG won approval for exports to FTA countries in August. It is awaiting DOE approval for non-FTA exports.

The U.S. has FTA agreements with Australia, Bahrain, Canada, Chile, Colombia, Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Oman, Panama, Peru, South Korea and Singapore.

About 54 companies have applied for applications to export LNG to FTA and non-FTA countries. Out of all applicants, only eight companies have applied to export more than 2 Bcf/d. The DOE has approved nine companies for exports to non-FTA countries.

If all applications were granted, roughly 47.05 Bcf/d would be exported to FTA countries and 40.31 Bcf/d to non-FTA countries.

Contact the author, Darren Barbee, at dbarbee@hartenergy.com.