ExxonMobil (ticker: XOM) has submitted a formal application to the Federal Energy Regulatory Commission to construct an LNG plant at its Golden Pass facility in Sabine Pass, Texas. The proposal, officially submitted on July 9, 2014, is part of a joint venture with Qatar Petroleum International and the pre-filing process began in May 2013.
A final investment decision between the two companies is expected by 2015. Initial estimates place expenditures at a total of $10 billion over the course of a five year period. The project has already received export agreements to Free Trade Agreement countries but an approval from the FERC would expand the Golden Pass’ customers to a worldwide level.
Currently, only two United States LNG plants have been granted government approval for exports, including one in Sabine Pass operated by Cheniere (ticker: LNG). First exports from Cheniere’s plant are currently scheduled for 2015. A total of six plants in the United States are expected to begin the exportation phase between 2015 and 2019, with total combined output of roughly 10 Bcf/d. The number of plants awaiting approval currently stands at 14.
The United States has been attempting to speed up the application process in order to address the projected increase in LNG consumption, particularly in Europe and Asia. The political race in Colorado between Representative Cory Gardner (R) and Senator Mark Udall (D) has highlighted this issue, with both sides taking steps to accelerate government urgency. Fox 31 Denver said, “With Colorado [being] a big producer of natural gas…Udall and Gardner have both been bending over backwards to demonstrate leadership on this issue.”
Gardner’s H.R. 6 bill, also known as the Domestic Prosperity and Global Freedom Act, passed through the House on June 25, 2014. The H.R. 6 is focused on cutting down one step of the approval process to 30 days and is now headed to the Senate. The two opponents have submitted a total of four bills to date, with each bill proposing shorter limits on the LNG approval process.
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