Freeport LNG’s Michael Smith launches second US LNG export project

The newest North American LNG liquefaction scheme to file for regulatory export approval is being headed up by Freeport LNG CEO and developer Michael Smith, and seeks to send out 2.8 billion cubic feet (bcf)/day, or 79.3 million cubic metres (Mm3)/day, from Brownsville, Texas.

The filing with the US Department of Energy (DOE) by Gulf Coast LNG Export LLC asks for long-term authorisation to export 20.6 million tonnes per annum (mtpa) of LNG for 25 years. The application from Gulf Coast LNG Export includes requests for trade to both free-trade and non-free-trade countries.

The project has been envisioned as a four-train facility, and will employ a liquefaction tolling structure instead of entering into a long-term gas supply contract, the 10 January filing with the DOE said. The company is hoping to begin exporting in 2018 or eight years from DOE approval.

Clients at the terminal will instead have the right to deliver gas to the facility in southern Texas and then receive LNG.

Gulf Coast LNG Export initially sent an application on 21 December to the DOE, but the federal agency deemed the application incomplete and returned it on 5 January.

The majority of Gulf Coast LNG Export stock is owned by Michael Smith, founder and CEO of Freeport LNG, a 2bcf/day import terminal south of Houston, Texas, that has since shifted its attention to exporting.

Neither Michael Smith’s office nor a Freeport LNG spokesman responded immediately to a request for comment.

The trusts of Kaily Morgan Smith and Tara Marielle Smith will each own 1.5% of the Gulf Coast LNG Export project.

Gulf Coast LNG Export’s DOE application is now the single largest request to the DOE, although it matches Freeport LNG’s export capacity target of 2.8bcf/day. Freeport LNG had originally aimed for 1.4bcf/day of LNG exports but doubled its intentions in a 12 January DOE filing.

The filing said the average LNG export value from Brownsville will be $7.00/MMBtu, which the company touted as a way to improve the US trade deficit.