LNG Main Pass Energy Hub Needed

Industry consortium wants to utilize McMoRan’s Main Pass Energy Hub™ (MPEH™) as a potential deepwater port facility.

United LNG, LP, and Freeport-McMoRan Energy LLC (FME), a subsidiary of McMoRan Exploration Co, are engaged in efforts to utilize McMoRan’s Main Pass Energy Hub™ (MPEH™) as a potential Deepwater Port facility to receive, store, condition, and liquefy domestic natural gas for export as liquefied natural gas (LNG). Natural gas would be received by pipeline at MPEH™, processed, and then transferred to on-site floating vessels for liquefaction and offloading to LNG transport vessels for export to foreign locations.

On January 4, 2013, the Department of Energy (DOE) authorized export of domestically produced LNG by vessel from the proposed MPEH™ Deepwater Port to any country that has or subsequently enters into a free trade agreement (FTA) with the United States. The approval allows export of up to 24 million tonnes of LNG per annum (3.2 bcf per day) for a 30-year term, beginning on the earlier of the date of first export or 8 years from the date the authorization is issued (January 4, 2021), pursuant to one or more long-term contracts with third parties that do not exceed the term of the authorization.

The project would utilize existing offshore structures of the McMoRan owned MPEH™ Deepwater Port, which was approved by the U.S. Maritime Administration in 2007 as a Deepwater Port for the importation and regasification of LNG, conditioning of natural gas to produce NGLs, and storage of natural gas in salt caverns. Modification of the Main Pass facilities to accommodate use as an LNG export facility would require additional permit approvals.

Based on metrics in a recent IHS Global Insight report, the utilization of 3.8 bcf/d of natural gas would result in the creation of over 100,000 direct, indirect, and economy wide jobs and have an immediate economic impact resulting in $3.6 to $5.2 billion in potential annual revenues.

"The United States has an abundance of natural gas and liquefied natural gas (LNG) exports will benefit the entire U.S. economy", said Stephen Payne, Chairman & General Partner of United LNG. "Exporting LNG to non-free trade nations will not only improve the Nation's current trade deficit, but also provide a strategic, non-monetary lever to countries in Asia and create needed jobs in the United States. United LNG is working to strategically partner with world-class corporations for exporting LNG to our Nation's allies around the world. Reports show that exporting natural gas should grow the U.S. economy by nearly $50 billion over the next seven years."

The Main Pass Energy Hub™, located sixteen miles off the Louisiana Coast, is far removed from any population centers and its location offers significant advantages said Erik Saenz, Chief Financial Officer at United LNG.

The planned use of the MPEH™ facility for the import of LNG previously underwent an extensive analysis under NEPA, including preparation of a full Environmental Impact Statement and review by other Federal and state agencies. This analysis resulted in a favorable Record of Decision issued by MarAd for the project. A similar positive result is fully expected for the facility’s proposed use for the export of LNG.