US Clears Golden Pass to Export to Non-FTA States
The Golden Pass LNG export venture project, 70% owned by Qatar Petroleum and 30% by ExxonMobil, has been cleared by the US government to export to non-Free Trade Agreement countries.
The US Department of Energy (DOE) announced April 25 that it has signed an order authorising Golden Pass Products LLC (Golden Pass) to export domestically-produced LNG to countries that do not have a free trade agreement (FTA) with the US – in other words, most countries in the world.
Golden Pass is thus authorised to export up to 2.21bn ft3/d of natural gas, in the form of LNG, to any non-FTA country not prohibited by US law or policy from the Golden Pass Terminal near Sabine Pass, in Jefferson County, Texas – a volume that equates to 16.5mn metric tons/yr.
After a signoff from federal regulator FERC in December, the DOE approval is expected to trigger a final investment decision by QP and Exxon.
Golden Pass was originally built as a giant LNG import facility to channel Qatari imports into the US Gulf Coast, but now is to be completely reinvented as a liquefaction and export venture after the US shale gas boom since the turn of the decade killed any prospect of significant LNG imports. The QP-Exxon joint venture said in 2013 that $10bn of investment would be required to convert it into an LNG export venture.
“With the dramatic increase in domestic natural gas production, the US is transitioning to become a net exporter of natural gas,” said the DOE April 25. It further added that, to date, it has authorised a total of 19.2bn ft3/d of natural gas exports to non-FTA countries from planned facilities in Texas, Louisiana, Florida, Georgia and Maryland: “These projects, if built, would position the US to be the dominant LNG exporter in the world."
During President Donald Trump’s election campaign, some of his supporters wanted fewer resources exported, to boost their availability to US manufacturers. But his Energy Secretary Rick Perry said April 25: “This announcement is another example of President Trump’s leadership in making the US an energy dominant force. This is not only good for our economy and American jobs but also assists other countries with their energy security.”
Shale gas boom forced rethink of Golden Pass venture
The Golden Pass venture estimates the re-construction of its facility will provide 45,000 jobs over five years, and the project will provide 3,800 permanent jobs over the next 25 years of operational activity, and estimates that during construction and 25 years of operation it will yield up to $2.4bn in federal and a further $1.2bn in state tax revenues.
DOE quoted a recent US Energy Information Administration’s Short Term Energy Outlook projecting average dry natural gas production of 73.1bn ft3/d in 2017, the second highest on record.
The DOE has judged that positive benefits will accrue to the US economy in scenarios with gas exports up to 28bn ft3/d in the form of LNG (equivalent to 210mn mt/yr) and therefore determined that exports from Golden Pass for a period of 20 years was “not inconsistent with the public interest.”
ExxonMobil, which said last month that it expected to have invested $20bn in manufacturing capacity on the US Gulf Coast in the ten-years to 2022, last week also announced the selection with Saudi state petrochemical group Sabic of a site for a planned multi-billion joint petchem project.
Mark Smedley