Texas LNG Plant Gets Export Permit

The Freeport LNG facility plans to convert from imports to exports

The U.S. Energy Department has issued a permit allowing a Texas liquefied natural gas (LNG) terminal to ship the fuel to Japan, the Washington Post reports.

The terminal, Freeport LNG, is an import facility that has plans to transform itself to export shale gas.

Japan's Osaka Gas and Chubu Electric have already agreed to buy all LNG from Freeport LNG's first phase over the next 20 years.

The permit, the second the Energy Department has granted for exports to a country that does not have a free trade agreement (FTA) with the U.S., allows the shipment of up to 1.4 billion cubic feet of natural gas per day.

U.S. LNG exports face opposition from some groups who object to natural gas drilling and from some petrochemical companies that would prefer to keep the fuel for domestic use.

Altogether, the 14 U.S. terminals seeking export permits could ship 28.7 billion cubic feet per day.

Senate Energy and Natural Resources Committee Chairman Ron Wyden said that the Energy Department "will be making export decisions on a case-by-case basis" and that the department should "assess the market impacts of each export decision after it is announced, to ensure American consumers are not harmed by large-scale exports."

On the Council on Foreign Relations (CFR) blog, CFR senior fellow Michael A. Levi writes that the conditional Energy Department approval still leaves the plant to get a permit from the Federal Energy Regulatory Commission (FERC) and that, despite the buyers lined up for Freeport LNG's exports, the natural gas might not ultimately come through.

Other U.S. LNG import facilities in Texas, Georgia, and elsewhere are also trying to switch over to exports.