Export nod triggers Texas LNG construction

After a federal export nod, Cheniere Energy, a liquefied natural gas pioneer, said it would proceed with construction of the first of two facilities in Texas.

The federal government this week gave the company's Corpus Christi, Texas, operational consent to send natural gas to countries that don't have a free-trade deal with the United States. A special permit is needed to send LNG to non-FTA countries and the Energy Department said the amount of exports sent from the plant would not violate the public's interest.

Cheniere in response said it made the final investment decision to proceed with the construction of the first of two so-called liquefaction trains, which processes gas into liquids. The company said its Corpus Christi plant is designed for up to three trains that could produce as much as 13.5 million tons of LNG per year.

"The first train is expected to start operations as early as 2018, with the second train expected to commence operations approximately six to nine months thereafter," the company said in a statement.

Cheniere in mid-December said it reached out to more than a dozen financial institutions to help arrange the estimated $11.5 billion needed to pay for the cost of developing the Corpus Christi project.

The company last year secured customers for gas sourced from the Texas plant. EDF, the largest gas company in Portugal, signed up for around 8.4 million tons per year from the project. Following U.S. government approval, Australian energy company Woodside Petroleum said conditions related to a July agreement are satisfied. Woodside confirms it's set for the purchase of 850,000 tons of LNG per year from the plant.

Supporters of LNG exports say it would provide a source of domestic economic stimulus and increase U.S. leverage overseas, while detractors fret over the perceived environmental threats posed by the subsequent increase in hydraulic fracturing.

A federal report found the increase in U.S. natural gas production could support as much as 80 percent of the potential increase in demand resulting from the increased LNG exports.