(Reuters) - The U.S. Federal Energy Regulatory Commission (FERC) on Thursday approved construction of two proposed liquefied natural gas (LNG) export terminals, Tellurian Inc’s Driftwood in Louisiana and Sempra Energy’s Port Arthur in Texas.
Demand for LNG around the world has exploded, rising by 9.8%to a record high for a fifth consecutive year in 2018, as countries, like China and India, seek cleaner alternatives to burning coal to meet their growing energy needs, according to data from the International Gas Union (IGU).
Driftwood and Port Arthur are just two of dozens of LNG export terminals under development in the United States, Canada and Mexico. With so many plants under development, analysts have said that most will likely not be built over the next decade.
Tellurian said it planned to make a final investment decision on its $30 billion Driftwood project, which includes pipelines and production fields in addition to the liquefaction plant, in 2019 with first LNG production expected in 2023.
Sempra has said it planned to make a final investment decision on Port Arthur around the first quarter of 2020.
Driftwood is designed to produce 27.6 million tonnes per annum (MTPA) of LNG or about 4 billion cubic feet per day (bcfd) of natural gas. The first phase of the project will likely comprise 16.6 MTPA, Tellurian has said.
One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.
Port Arthur is designed to produce 13.5 MTPA of LNG or about 1.8 bcfd of gas.
“Today’s orders show FERC is making a lot of headway on processing LNG applications in a more efficient manner, and I’m proud of the work that we are doing,” FERC Chairman Neil Chatterjee said in a statement.
Over the past year, some officials in U.S. President Donald Trump’s administration, including Energy Secretary Rick Perry, have urged FERC to speed up its process of reviewing pending LNG export applications to boost gas exports as part of the president’s energy dominance strategy.
“LNG exports can help increase the availability of inexpensive, clean-burning fuel to our global allies who are looking for an efficient, affordable, environmentally friendly source of generation,” Chatterjee said.
The United States, a net importer of LNG before Cheniere Energy Inc shipped its first cargo from Sabine Pass in Louisiana in February 2016, became the third-biggest exporter of the supercooled fuel by capacity in 2018, behind Australia and Qatar.
Looking at only the plants currently under construction, U.S. LNG export capacity is expected to rise to 8.5 bcfd by the end of 2019 and 10.0 bcfd in 2020, from 5.2 bcfd now.
Reporting by Scott DiSavino; Editing by Bernadette Baum and Diane Craft
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