TOKYO, Sept 10 (Reuters) - Freeport LNG expects to take the final investment decision on its third processing unit at its liquefied natural gas (LNG) project in Texas near the end of 2014, the head of the company told Reuters on Tuesday.
The Houston-based firm signed separate liquefaction tolling contracts on Monday with Japan’s Toshiba Corp and South Korea’s SK E&S for the plant’s third production unit, or train, to freeze natural gas for shipping.
The processing capacity from the first two trains has already been contracted to Britain’s BP and Japanese utilities Osaka Gas Co and Chubu Electric Power Co . The final investment decision on the first two trains is expected in the first quarter of next year.
“We’re on the schedule for a final EIS (Environment Impact Statement) on Dec. 27 ... which will allow us to get approved in January, February and start construction in March,” CEO Michael Smith said on the sidelines of an LNG conference in Tokyo, speaking of the construction plans for the first two trains.
Asian and European companies have been queuing up to import U.S. natural gas, supplies of which are at record highs thanks to horizontal drilling and hydraulic fracturing that have unlocked vast reserves of the fuel from shale rock formations, pushing U.S. prices far below global levels.
LNG prices in Asia at the same time have risen since the Fukushima disaster in March 2011 closed most of Japan’s large fleet of nuclear power stations and left the country scrambling for substitute fuel for power generation.
Cheap U.S. gas has attracted other Japanese companies, as well as firms in India and Europe, that have agreed to buy LNG from other proposed export plants in the United States.
The U.S. Department of Energy granted the Freeport LNG project, just south of Houston, Texas, conditional authority in May to export at a rate of up to 1.4 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years.
That would be equivalent to more than 10 million tonnes of LNG a year, and would cover the project’s first two trains, each with an annual capacity of 4.4 million tonnes.
Freeport is still waiting for a construction permit for the first two trains from the Federal Energy Regulatory Commission, which the company expects will be granted in the first three months of next year.
First exports are targeted for early 2018. The third train - also with a capacity of 4.4 million tonnes a year - is expected to come online near the end of 2018.