August 24, 2007 / 8:14 PM / 12 years ago

U.S. LNG import capacity on verge of doubling

FREEPORT, Texas, Aug 24 (Reuters) - The United States’ first new onshore LNG terminal in 25 years is nearly finished, and when it begins operation early next year will lead a parade of start-ups over the next 18 months that will double U.S. natural gas import capacity.

Freeport LNG’S $800 million facility is expected to begin undergoing tests the last two weeks of September and to be ready for operation around the end of March 2008.

“We’re getting ready for start-up,” said Bill Henry, vice president of Freeport LNG Development LP.

With the U.S. East and West Coasts resisting terminals on environmental and safety grounds, four are being built amid the refineries and chemical plants on the Texas-Louisiana Gulf Coast.

When all are in operation - expected by mid-2009 - they will add more than 7 billion cubic feet per day (Bcfd) of capacity to a U.S. gas market that now averages 60 Bcfd.

The addition will more than double current U.S. liquefied natural gas import capacity of less than 6 Bcfd.

“The increased terminal capacity that’s coming along is a big positive for the U.S. energy infrastructure,” said Blake Roberts of Cambridge Energy Research Associates.

With five terminals already operating, CERA says that by 2015, LNG imports will represent a fifth of U.S. natural gas supply.

With government estimates that U.S. natural gas use will reach 25 Tcf in 2015, that would mean imports of 5 Tcf a year, more than five times the 900 Bcf expected this year.

Freeport LNG will not be the first U.S. terminal since the four built in the 1970s and ‘80s. Excelerate’s Gulf Gateway, a buoy system 116 miles off Louisiana, opened in 2005.

But it will the first of a new round of onshore terminals, which have taken longer because they are bigger, more costly and many communities oppose having them as neighbors.

Cheniere Energy’s (LNG.A) Sabine Pass plant, on the Texas-Louisiana border near Port Arthur, is a close second, with start-up planned in second quarter 2008.

Forty miles northeast, Sempra’s (SRE.N) Cameron LNG, expected on line in late 2008 or early 2009, rises next to the Calcasieu River between Lake Charles and Cameron, Louisiana.

Exxon Mobil’s (XOM.N) Golden Pass, just across the Sabine Pass channel from Cheniere’s plant, is expected in 2009.

At Freeport LNG, workers, trucks and cranes are busy around nearly complete tanks, pipes, docks and other equipment.

Freeport’s tanks, less than a mile from the Gulf Coast and six miles from deep water, are 200 feet high, each supported by 576 piles driven 110 feet into the ground.

Seven vaporizer trains, handling 250 million cubic feet of gas each, use 3 million barrels of water-glycol solution daily to warm LNG from minus-260 degrees Fahrenheit into gas.

About 1,400 workers are pushing to complete Freeport. An operating staff, which will total 60, is in training.

“I can remember when it was four,” Henry said, recalling days when the project seemed a long shot.

The site had to be raised to 15 feet above sea level to minimize hurricane risk. A 21-foot-high levee stands between the plant and the Gulf to protect it from storm surge waves.

Plans are to take no chances with storms, though. “We’ll shut down the plant. The ships will leave. We’ll lock everything down and evacuate everybody,” Henry said.

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