By RUSSELL GOLD
Royal Dutch Shell is in advanced negotiations with Freeport
LNG Expansion L.P. to become a major
exporter of liquefied natural gas from the US Gulf Coast,
Freeport's CEO Michael S. Smith said Tuesday.
Mr. Smith said he hopes to finalize an agreement with the
Shell by the end of 2012 for the global energy giant to take
1.35 billion cubic feet/day of natural gas for export from
Freeport LNG's Texas facility.
If the deal is signed, Mr. Smith said, the liquefied natural
gas facility could be operational by 2018 or 2019. A spokesman
for Shell confirmed that it was in negotiations with
Freeport LNG also announced on Tuesday it had signed a
binding agreement with Japanese power companies Osaka Gas Co.
and Chubu Electric Power Co.
The Japanese companies have agreed to contract for about 650
million cubic feet/day of LNG capacity from Freeport. This gas
would be liquefied, put on tankers and exported to Japan.
Growing supplies of natural gas in the US and growing demand
from Asian countries has drawn interest in this export trade.
The US currently exports a small amount of gas to Japan, from
Alaska, and into Mexico.
Freeport still needs to obtain licenses from both the
Department of Energy and the Federal Energy Regulatory
Commission before the LNG facility can be built or gas exported
Mr. Smith said these approvals are expected by next
We are investing for new growth both in onshore gas
and LNG, said Shell spokesman Bill Tanner. We see a
good, reliable supply of gas in the US for both domestic use
Shell is also looking into gas export from Canada. Last
week, it filed an application with Canadian authorities to
build an export facility in British Columbia along with Korean
and Chinese partners.
This facility, at full capacity, would be capable of
exporting 3.4 billion cubic feet of gas daily.
Dow Jones Newswires