Energy Dept. OKs La. liquid natural gas exports

Last Updated: Sun, May 22, 2011 11:20 hrs

The government has cleared the way for a terminal in southwestern Louisiana to export part of the U.S.'s burgeoning supply of natural gas.

The Energy Department said this is the first time an exporter has been allowed to send natural gas from the lower 48 states as liquefied natural gas, or LNG, to all U.S. trading partners.

Cheniere Energy Partners LP, based in Houston, said Friday it will be allowed to export up to 803 billion cubic feet of gas a year from its Sabine Pass LNG terminal. The gas will be carried on tankers after being chilled to super-low temperatures to become liquefied natural gas, which makes it easier to transport by ship.

The terminal went into service in 2008 to handle imported natural gas during shortages. That was before domestic supplies skyrocketed as vast amounts of gas in shale rock formations became easier to extract. The Energy Department reported Wednesday that the U.S. has nearly two trillion cubic feet of natural gas in underground storage and supplies have been steadily growing.

Exports are expected to begin in 2015. Cheniere, which did not provide a cost estimate for expanding the terminal for exports, said a final investment decision will be made after it determines how many exporting contracts it can obtain, along with financing and final regulatory approval from the Federal Energy Regulatory Commission.

Cheniere said that under the Energy Department decision, it will have seven years to begin exports after FERC approval. The terminal will maintain its current ability to import LNG.

"The ability to export natural gas will further stabilize production for U.S. consumers, stimulate the economies through job creation and provide a boost to American global competitiveness," said Cheniere Partners CEO Charif Souki. "Exports will promote domestic production of U.S. energy and help reduce our country's reliance on foreign sources."

Cheniere Energy Partners is a limited partnership formed in 2007 by Cheniere Energy Inc.

Cheniere Energy shares jumped $2.35, or 30.6 percent, to close at $10.04. Shares of Cheniere Energy Partners rose 87 cents, or 5.1 percent, to close at $17.90.