Hydrocarbon Processing Copying and distributing are prohibited without permission of the publisher
Email a friend
  • Please enter a maximum of 5 recipients. Use ; to separate more than one email address.



Exelon buys control of Annova LNG project in Texas to export shale gas

07.11.2014  | 

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.

Keywords:

By JOE CARROLL
Bloomberg

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 Exelon’s 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 projects, 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 tankers.

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 Annova’s 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.

Shale Bonanza

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.



Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Related articles

FEATURED EVENT



Sign-up for the Free Daily HP Enewsletter!

Boxscore Database

A searchable database of project activity in the global hydrocarbon processing industry

Poll

Should the US allow exports of crude oil? (At present, US companies can export refined products derived from crude but not the raw crude itself.)


69%

31%




View previous results

Popular Searches

Please read our Term and Conditions and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2014 Hydrocarbon Processing. © 2014 Gulf Publishing Company.