Energy marketers who are getting battered by low natural gas prices will welcome today’s news that the Department of Energy (DOE) has granted final approval for up to 1.7 billion cubic feet (BCF) a day of liquefied natural gas (LNG) exports from a Louisiana terminals.
The Cameron LNG facility in southwestern Louisiana now holds all the approvals it needs to export LNG to trading partners in Asia, where natural gas prices are three to four times the U.S. price. Observers such as American’s Energy Advantage, a coalition of major U.S. manufacturers, believe that LNG exports will drive up domestic natural gas prices. This would be excellent news for heating oil marketers, many of whom have suffered market share erosion as customers switch to natural gas heat, which has enjoyed a substantial price advantage in recent years.
Cameron LNG becomes the second major U.S. facility to receive final approval for LNG exports and is expected to begin shipping in 2018. Cheniere Energy’s Sabine Pass facility last month received DOE approval to export up to 2.2 BCF of LNG and expects to be operational in 2015.
Four more companies have received conditional approval for LNG exports. Final approval could come quickly, now that the Obama administration has ensured prompt consideration for LNG export applications.