NEW YORK Feb 21 U.S. energy regulators on Thursday vacated Calhoun LNG's authorization to build a liquefied natural gas (LNG) import terminal in Texas, two months after the company requested that the authorization be rescinded.
In 2007, the U.S. Federal Energy Regulatory Commission (FERC) authorized Calhoun to build and operate a terminal and associated infrastructure that would regasify up to 1 billion cubic feet of natural gas per day. The 2007 authorization required that the facilities begin service within five years of the final approval, which would have been by Sept. 20, 2012.
On Dec. 14, 2012, Calhoun LNG filed to vacate the authorization, saying it was abandoning its plans for the facility located in Port Lavaca, Texas, the FERC said in its filing on Thursday.
The tides turned for U.S. LNG import terminal projects after drilling technologies allowed domestic gas producers to unlock vast amounts of the fuel over the last five years, all but canceling the need for gas imports.
Natural gas is used to heat more than half of U.S. homes in winter.
Total annual LNG imports peaked at 770.8 billion cubic feet (bcf) in 2007, according to the U.S. Department of Energy (DOE). Between January and November 2012, gas imports dwindled to 157.8 bcf, DOE data showed.
Companies that invested in LNG import terminals have been applying to convert them to export facilities as sharply higher domestic production has depressed local prices. Global demand is strong and LNG can at times fetch six times the amount paid in the United States.
New York Mercantile Exchange (NYMEX) natural gas futures prices settled on Thursday at $3.246 per million British thermal units (mmBtu). By comparison, NYMEX prices in 2007 averaged $7.11 per mmBtu.
Cheniere Energy Inc is so far the only company that has been given approval and has begun construction of an export terminal in Sabine Pass, Louisiana.
Calhoun LNG was backed by Gulf Coast LNG Partners LP, a partnership between Gulf Coast LNG LLC and Haddington Energy Partners II LP, a private equity fund managed by Houston-based Haddington Ventures LLC.
Calls to Haddington were not immediately returned.