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US shale gas revolution trickles down to BRICs – DOE

20th May 2013

Shale gas boom sparks US DOE to approve exports of domestic LNG to non-FTA countries

US shale gas revolution to trickle down to BRICs – DOE
Freeport is conditionally authorised to export at a rate of up to 1.4 Bcf/d for a period of 20 years

The US on Friday cleared a second terminal to export domestically produced liquefied natural gas (LNG) to countries which do not hold a free trade agreement (FTA) with it. The move comes hot on the heels of the country’s continued extraction of large amounts of shale gas and could prove advantageous to both India and China.

The authorisation from the US Department of Energy (DOE) allows the export of domestic LNG from Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC from its   LNG terminal on Quintana Island, Texas. Freeport is conditionally authorised to export at a rate of up to 1.4 billion cubic feet of natural gas per day (Bcf/d) for a period of 20 years.

Freeport first received approval to export LNG to FTA countries on 10 February 2011. The DOE granted its first authorisation to export LNG to non-FTA countries to the Sabine Pass LNG terminal in Cameron Parish, Louisiana, at a rate of up to 2.2 Bcf/d.

China, Japan and the UK will directly benefit from the move, according to The Economic Times, as companies from the three countries already hold a large stake in the company. While India has no vested interested in either Freeport or the Sabina Pass LNG terminal, the US DOE’s move could pave the way to future LNG exports to the energy hungry nation.

The DOE’s clearance is still subject to environmental review and final regulatory approval. Under the country’s Natural Gas Act, the Department of Energy may grant export clearances unless it finds that the proposed exports “will not be consistent with the public interest”.

“The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country,” the DOE said in a written statement

US natural gas production will reach a record 69.3 Bcf/d this year, according to figures from the Energy Information Administration (EIA).