By ANGEL GONZALEZ and BEN LEFEBVRE
HOUSTON -- A joint venture between Exxon Mobil Corp. and
Qatar Petroleum is asking federal authorities for permission to
export large quantities of liquefied natural gas made in the US
from an existing terminal in Louisiana, an executive said late
If permission is granted, Exxon, the biggest natural-gas
producer in the country, and its partner would spend $10
billion converting a recently finished terminal built to import
natural gas into a facility capable of exporting 15.6 million
tpy of LNG, or approximately 2 billion cubic feet/day.
The US produces about 72 billion cubic feet/day of natural
The move acknowledges the dramatic shift in energy markets
produced by the development of techniques to produce natural
gas from shale formations across the US.
After years of fretting about natural gas scarcity and
spending billions constructing import terminals to bring the
fuel from places as far as Qatar and West Africa, energy
companies now seek to turn the US into a major energy
The market changed from what we originally
envisioned, said Bill Davis, project executive for the joint
venture, Golden Pass Products. Something changed along
the way - it was the discovery of vastly significant gas
The joint venture's application is for export to countries
with which the US has a free-trade treaty; it says it will
submit an additional application for countries that haven't
signed free-trade agreements with the US soon.
Mr. Davis said it could take several years to get regulatory
approval and up to five years to build the liquefaction facilities at the terminal.
A rival company, Cheniere Energy, already has authorization
to ship LNG worldwide from a terminal near Exxon's Golden Pass
Facility. But Exxons application puts its heft behind the
controversial drive to export US natural gas.
Proponents say that exports will boost the US economy and
create jobs, while critics charge that exporting will raise
prices for domestic consumers and lead to greater use of the
drilling method known as hydraulic fracturing, which some environmentalists fear could cause
US natural gas producers, straining under a collapse in
domestic prices, have hoped for the chance to sell natural gas
to overseas markets where prices can be much higher.
As new drilling technology helped unlock increasing
amounts of natural gas, prices plummeted to $1.90 per million
British thermal units in April from nearly $14 per million
British thermal units in July 2008.
Natural gas futures for September delivery closed Friday at
$2.719 per million British thermal units, down 0.5 cent, or
0.2%, as traders worried that excess supply would continue
despite a drop in the number of rigs drilling for natural
Customers from the UK, Korea, India and Spain have already
contracted supply from Cheniere. The company, which recently
gave the order to start building the facility, expects to start
deliveries in 2015.
Dow Jones Newswires