Osaka Gas believes US will soon approve Freeport LNG exports to Japan


TOKYO -- Osaka Gas Co. is confident that it will be allowed to import liquefied natural gas to the Japan from the Freeport project in Texas, a company executive said Monday.

Osaka Gas and Chubu Electric Power Co. signed in August last year a 20-year contract with Freeport LNG Development to import up to 2.2 million tpy each of LNG from Freeport's facility on the US Gulf Coast.

The facility is slated to start operations in 2017.

The question of whether the US Department of Energy will approve the agreement has been of investor interest because the department said last year it wouldn't approve any plans to ship LNG to countries without a free-trade agreement with the US until it completed a review of natural gas shipments, including whether they will help create US jobs and offset trade imbalances.

"How much LNG the DOE will approve to export is an issue. But we are at the top of the line waiting for screening by DOE, in a position sure to get an approval," Koichiro Age, a general manager at Osaka Gas's LNG trading department, told Dow Jones Newswires.

A study commissioned by the DOE said in December that natural gas exports would benefit the US economy, leading to net economic gains that would outweigh the downside resulting from higher natural gas prices.

The DOE has invited the public to provide comment on the report in relation to 15 applications pending approval to export LNG from the US. The report and resulting comments will be taken into consideration when the department makes its decision in each case.

"We expect DOE will start the process soon after the public comment period is closed in late February," said Mr. Age.

The Freeport contract will be effective once the US government grants a license to export LNG to Japan.

Several LNG projects have sought the DOE's approval to ship their output overseas. So far only Cheniere Energy has received all the necessary permits to export from a terminal in Louisiana to countries that do not have free-trade agreements with the US, mostly in Asia, which are the biggest buyers of LNG.

The list of applicants include Freeport LNG in Freeport, Texas, partly owned by ConocoPhillips and Dow Chemical; Golden Pass LNG near Sabine Pass, Texas, a project backed by ExxonMobil and Qatar Gas; and Cameron LNG in Cameron Parish, La., owned by Sempra Energy.

Dow Jones Newswires

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