With its 55 nuclear reactors currently offline in answer to the devastating earthquake and tsunami it suffered in March 2011, Japan has been forced to import more expensive alternative fuels to replace the homegrown nuclear-fueled electrical generation capacity which previously made up between a quarter and a third of the country’s electrical output and helped it achieve energy independence in large measure.  Today, with a return to nuclear power in serious question, Japan needs to lock up significant sources of alternative fuels to generate the amount of electricity it needs to sustain and grow its vast industrial production.

japan1According to the EIA, “Japan meets less than 15% of its own total primary energy use from domestic sources. It is the third largest oil consumer and importer in the world behind the United States and China. Furthermore, it ranks as the world’s largest importer of liquefied natural gas (LNG) and second largest importer of coal behind China. … Japan spent $250 billion on total fuel imports in 2012, a third of the country’s total import charge.”

In May the U.S. DOE proposed significant changes to the natural gas export review process, and in recent weeks, Congress has introduced two bills, one out of the House, the other out of the Senate, that would shorten DOE approval times to 90 days and 45 days, respectively, after an LNG export project has received Federal Energy Regulatory Commission approval.

Several new natural gas liquefaction plants in the U.S. are under construction or in the permitting process, with six targeting 2015 to 2019 to begin exporting LNG. Three of the six hope to ship gas to Japan.  The Houston Chronicle’s Fuel Fix recently reported on the six U.S. LNG export plants that are being prepared for LNG export operations, representing a combined output of nearly 10 billion cubic feet per day:

 

Sabine Pass LNG Terminal

Cheniere’s Sabine Pass facility, now under construction at the site of its existing import terminal, is the only fully permitted new liquefied natural gas export project. First proposed in 2010, the Sabine Pass project effectively kicked off the new LNG export frenzy.

Location: Cameron Parish, La.

Company: Cheniere Energy Inc. (ticker: LNG)

Proposed first exports: 2015.
Customers: Britain’s Centrica and BG Group, France’s Total, Korea Gas, GAIL India, Spain’s Gas Natural Fenosa

japan2Export license: Final approval Aug. 7, 2012 to export 2.2 billion cubic feet per day; pending application for additional 520 million cf/day

FERC license: Final authorization April 16, 2012

 

Cove Point LNG

Dominion’s plans to add liquefaction equipment to the decades-old Cove Point LNG receiving terminal have drawn fierce opposition from environmentalists, worried the East Coast project would be a critical outlet for Pennsylvania and Ohio Marcellus Shale production they oppose. The project’s relatively small export plans — just 770 million cubic feet per day — could be an asset in the race to finance and build new liquefaction projects.

Location: Lusby, Md.

Company: Dominion (ticker: D)

Expected first exports: 2017.
Customers: Japan’s Kansai Electric Power Co., Tokyo Gas Co., GAIL India and Japan’s Sumitomo Corp. (through its U.S. subsidiary Pacific Summit Energy)

Export license: Conditional approval Sept. 11, 2013 to export 770 million cubic feet per day.

FERC license: Second in line for review.

 

Freeport LNG

Freeport LNG holds two conditional permits to export a combined 1.8 billion cubic feet a day from an export plant near its existing import terminal.

Location: Quintana Island, Brazoria County, Texas

Companies: Freeport LNG Investments, ZHA FLNG Purchaser LLC, Dow Chemical Co. subsidiary Texas LNG Holdings and Osaka Gas Co. subsidiary Turbo LNG.

Proposed first exports: 2018.
Customers: BP, Japan’s Osaka Gas, Japan’s Chubu Electric Power, South Korea’s SK E&S, and Toshiba Corp.

Export license: Conditional approval May 17, 2013 to export 1.4 Bcf/day. Conditional approval Nov. 15, 2013 to export an additional 400 million cubic feet per day.

FERC license: Third in line for review.

 

Lake Charles Liquefaction Project

Although Lake Charles was ahead of the pack in filing for its export license, it only recently filed for its FERC permit.

Location: Lake Charles, La.

Companies: BG Group and Energy Transfer Equity and Energy Transfer Partners (including ETE and ETP subsidiaries Trunkline LNG Co. and Trunkline LNG Export)

Expected first exports: 2019.
Customer: BG Group (which has exclusive rights to the full export capacity)

Export license: Conditional approval Aug. 7, 2013 to export 2 Bcf/day.

FERC license: Initial application.

 

Cameron LNG

Partners on the Cameron LNG project cover the range of the LNG value chain, including Japanese shipping company Nippon Yusen Kabushiki Kaisha and French electricity and gas utility GDF Suez. That broad reach could be an advantage in financing the project.

Location: Hackberry, La.

Companies: Sempra (ticker: SRE), GDF Suez, Mitsubishi Corp., Nippon Yusen Kabushiki Kaisha and Mitsui

Expected first exports: 2019.
Customers: Japan’s Kansai Electric Power Co. and Japan’s Toho Gas.

Export license: Conditional approval Feb. 11 to export 1.7 Bcf/day.

FERC license: Next in line for review.

 

Jordan Cove Energy Project

As the first newly proposed LNG export facility on the West Coast, the Jordan Cove plant would have better access to customers in Asia. But it also has some big obstacles, including its status as the lone greenfield project – one not part of an existing import facility — to hold a conditional LNG export license. The project also requires construction of a 230-mile pipeline. And environmental opposition in the Pacific Northwest could be significant.

Location: Coos Bay, Ore.

Company: Veresen Inc.

Expected first exports: 2019.
Customers: Company has announced non-binding agreements with prospective customers in the Asia Pacific market with negotiations expected throughout the spring and summer. (Indonesia, India and an unnamed Eastern Asia country).

Export license: Conditional approval March 24 to export 1.2 Bcf/day.

FERC license: In review, after formal application filing in May 2013.

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