By JOE CARROLL
Exelon Corp., operator of the largest US network of nuclear
power stations, has acquired a company that plans to export
natural gas from the shale boom.
The company bought a 96% stake in Annova LNG, a startup in
the early stages of building a $1.3 billion liquefied natural
gas-export terminal in Brownsville, Texas, David Chung,
founder of Annova and now an Exelon vice president, said in
an interview Friday.
Chung, who retains a minority stake in Annova, oversees
Chicago-based Exelons LNG business.
The company is one of more than two dozen in the US proposing
to build facilities
that refrigerate gas to
shrink it to 1/600th of its normal volume so booming output
can be shipped overseas in tankers. Unlike most of the other
s, which seek to transport
LNG aboard huge ocean-going vessels, the Annova complex will
sell the fuel in smaller quantities to customers that lack
the port facilities
to handle large
Black & Veatch Corp. is performing preliminary design and
engineering work for the Gulf Coast plant, which is scheduled
to begin operation in early 2019, according to Annovas
website. Chung declined to give a cost estimate for the project
, which would ship 2
million tpy of gas to customers in countries that have
free-trade agreements with the US.
Eventually, the plant could triple in size to 6 million tpy,
Chung said. Exelon plans to buy gas from the Eagle Ford shale
formation in south Texas as well as from the interstate
pipeline system to supply the Annova facility.
The company is looking at many opportunities and
may branch out into other gas export developments, said
Chung, who formerly helped oversee global LNG marketing at
Macquarie Group and founded Annova last year.
Utilities, chemical makers and fuel brokers around the world
are clamoring for access to US gas supplies that are a
fraction of the cost of fuel from other nations after
shale-drilling innovations glutted the domestic market.
For Exelon, which also distributes power from gas-fired
generators, a rally in the US gas market would be a boon
because electricity prices move in tandem with the fuel. The
company said in October that LNG exports as well as expanding
industrial and power plant demand for gas, will help keep
prices between $4 and $6/MMBtu between 2017 and 2020.
Gas futures prices have averaged $4.622/MMBtu on the New York
Mercantile Exchange this year.