Company News

Oxy still waiting on gas for Texas LNG terminal

DOHA, Oct 30 (Reuters) - U.S. Occidental Petroleum OXY.N has yet to finalise gas supply deals for a Texas liquefied natural gas (LNG) terminal and will not start construction without them, a senior company executive said on Tuesday.

Oxy slowed plans to build the Ingleside plant near Corpus Christi in January. It had initially intended start up in 2008.

“We have to get supplies signed before we start construction,” said Stephen Weiman, senior vice president for business development. “The plant will be ready 3 years after we start construction.”

Oxy has signed a deal for supplies from Nigerian LNG and a letter of intent with Algerian state oil and gas giant Sonatrach. Nigerian LNG is to supply a million tonnes a year of LNG, which is gas chilled to liquid for transport on ships.

The Sonatrach deal calls for supply of 250 million cubic feet per day, but that was yet to be finalised, Weiman told reporters on the sidelines of a gas conference in Doha.

The two deals, if completed, would supply about half the volume needed, he added. Oxy was in discussion with other LNG suppliers for the other half, but Weiman was unable to say when he hoped to complete sourcing the supplies.

Ingleside, intended to unload LNG from ships, regasify it and ship as much as 1 billion cubic feet of gas per day, has been licensed by the U.S. Federal Energy Regulatory Commission.

Forecasts for declining U.S. gas production and expected high prices for imported LNG triggered more than 40 proposals for new terminals after 2000, although shifts in the market have since slowed growth.