Texas LNG Gets Approval To Export LNG To FTA countries

By Joseph R. Fonseca
Wednesday, June 11, 2014
Texas LNG’s liquefaction plan at its 110 acre complex at the Port of Brownsville

 

Texas LNG LLC today announced that it has received authorization from the U.S. Department of Energy (DOE) to export domestically produced LNG to all existing, and any future, countries that have, or enter into, an FTA with the Government of the United States. DOE approval of FTA exports is an important component of the regulatory process necessary to develop Texas LNG's project on its 110 plus acre site with deepwater frontage to the Port of Brownsville shipping channel in Brownsville, Texas, USA.

Under the DOE's order, Texas LNG has received authority to export on its own behalf and as agent for others, up to the equivalent of 100 Bcf/y (approximately 2 MTA) of domestically produced LNG.  The authorization is for a term of 25 years, commencing on the earlier of the date of first export or 10 years from the date the authorization is issued.

Vivek Chandra, CEO of Texas LNG remarked, “Receipt of DOE FTA approval is a key regulatory milestone for the Texas LNG project. We thank the DOE for their analysis and approval of our application and look forward to receipt of non-FTA approvals in the near future. LNG exports will play an important role in the continued development of the US gas industry and our Texas LNG project will provide valuable employment and other economic benefits to Brownsville and the Rio Grande Valley region.”

Texas LNG also announced it has entered into an agreement with Samsung Engineering Co. Ltd., which  is ranked among the top global engineering and procurement contractors and is member of the Samsung Group of companies.

Under the agreement, Samsung Engineering will provide Pre-Front End Engineering Design (Pre-FEED) and Front End Engineering Design (FEED) services for the Texas LNG project. Samsung Engineering plans to complete FEED in the second half of 2015 and expects to engage open book cost estimating to enable the execution of a Fixed Price EPC Contract to be signed at time of project Final Investment Decision (FID). Samsung Engineering and Texas LNG have begun to evaluate LNG liquefaction technologies on the basis of reliability, efficiency, and proven operational performance.

As a strategic commitment to the project, Samsung Engineering will also become a minority equity interest owner in the Texas LNG project.

“We are very pleased to announce the selection of Samsung Engineering as our engineering and construction partner,” said Langtry Meyer, COO of Texas LNG. “Samsung Engineering has completed major hydrocarbon projects around the world, and its robust balance sheet and strategic equity participation gives the Texas LNG project added credibility and strengthens the FID process. 

Samsung Engineering has an enviable reputation for delivering mega projects on a ‘safety first’ basis, within strict cost control parameters. Its relationship with major Korean LNG offtakers and financial institutions is also a big plus, especially since Korea is the second largest consumer of LNG in the world. Furthermore, Korea has an FTA with the United States.”

Samsung Engineering supports Texas LNG’s concept to construct the liquefaction unit on a barge/skid-mounts in a controlled shipyard environment. Texas LNG’s innovative pre-fabricated liquefaction solution will minimize complex onshore civil construction works and project costs, reduce the overall local environmental and labor impact, and expedite speed to market.

Samsung Engineering will provide technical studies and documentation to support Texas LNG’s Federal Energy Regulatory Commission (FERC) permit pre-filling application process.  Texas LNG plans to formally commence the FERC pre-filing permitting process in the second half of 2014.

“Samsung Engineering has assembled a strong team of LNG project engineers and experts from our global engineering centers to execute the project. We have successfully completed the Conceptual Study and have commenced pre-FEED activities for the Texas LNG project, which are being executed by Samsung Engineering America, Inc. in Houston, with support from Samsung Engineering’s headquarters office in Seoul, Korea. We are committed to making this innovative Texas LNG project a success,” said Dennis Kwan, Vice President of Samsung Engineering America.

Texas LNG also recently signed a Feed Gas Supply Cooperation Agreement with a top-ten US gas marketer. This agreement will provide Texas LNG offtakers an option for flexible and competitive integrated gas supply and natural gas management services to deliver natural gas to the project.

Discussions are ongoing with potential equity investors and LNG consumers in anticipation of first LNG deliveries in late 2018.
 

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