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LNG Projects Underway in Southwest Louisiana

Via The American Press

If you’ve been in Southwest Louisiana any length of time, you’ve undoubtedly heard the term “LNG,” which is short for liquefied natural gas.

Once natural gas is extracted from the ground it’s piped into pressurized trains, cooled to a liquid and shipped around the world in LNG tankers. Once a tanker arrives at its destination, the LNG is regasified and used in manufacturing, as well as in homes for cooking and heating.

Southwest Louisiana was for years an import site for LNG, but a turn in the market several years ago made exporting more profitable. Seeing the opportunity for large returns, companies began announcing plans to build multibillion-dollar export facilities in the region — an industrial hub with ready access to pipelines, workers and the Gulf of Mexico.

One of these companies, Cheniere Energy’s Sabine Pass LNG, has achieved its goal of becoming an exporter, and it’s now the only operating export terminal in the contiguous U.S. Another, Sempra’s Cameron LNG in Hackberry, is expected to start operating in 2019.

Eight others are still in the planning stages. Some, like Magnolia LNG and Lake Charles LNG, have received permits and are waiting on buyers before making a final investment decision. Others are tied up in federal permitting, a lengthy process that includes an in-depth look at each company’s viability and its impact on the environment.

Many are having trouble securing buyers because global demand — although expected to spike in the early 2020s — is still not where it needs to be, resulting in project delays. The current glut, coupled with the low price of oil, has led to lethargy in the market, an attitude these LNG companies hope will soon change.

The American Press reached out to the planned LNG companies for an update on their progress. Contact information for two of them, Louisiana LNG and Live Oak LNG, couldn’t be found. Both were once projects of Parallax Energy — a company led by Martin Houston, who’s now heading up another local project, Driftwood LNG.

The following 10 companies affirmed their commitment to exporting from Southwest Louisiana:

Cameron LNG 

Construction on the Hackberry project began in 2014 and is set to wrap up in 2018.

Besides its forerunner, Cheniere, which is already operating, it’s the only local LNG project underway. One reason the two companies have outpaced their competitors is that they already had import facilities, which they continue to maintain.

The only other LNG export company that was an importer was Lake Charles LNG, formerly Trunkline LNG.

Commonwealth LNG

Commonwealth LNG, formerly Waller LNG, is planned for the mouth of the Calcasieu Ship Channel down in Cameron Parish.

It started the prefiling phase with FERC this year and has Department of Energy approval to ship to countries with free-trade agreements, but is still awaiting approval to ship to non-FTA countries.

It expects to start operating in the second quarter of 2022.

Delfin LNG 

Delfin LNG — the first offshore LNG project in North America — will set up 45 miles off the Cameron coast, feed gas in from existing pipelines and liquefy it in floating trains.

William Daughdrill, the company’s health and safety director, said the company has an advantage over its competitors because it won’t have the high overhead of maintaining a dredged berth and is more easily accessible to ships.

Additionally, it won’t depend on the ship channel being properly dredged, a costly necessity that doesn’t have a secure source of funding, he said.

Delfin expects to operate in 2021 or 2022 and has signed a joint development agreement with Golar LNG to build and operate the project. Delfin falls under other federal regulators besides FERC. But Daughdrill said the company is nearing the end of the process and expects to reach final investment decision in 2018.

Driftwood LNG 

Driftwood LNG might be the newest project, but it’s certainly one of the fastest growing.

The Calcasieu Parish project was founded in 2016 by Martin Houston and Charif Souki after Souki was ousted from his top position at Cheniere. Souki guided Cheniere’s transition from an import to an export company, so he comes with experience.

Driftwood has gotten DOE approval to export to FTA countries and is awaiting non-FTA approval. It finished the prefiling phase and is now going through the FERC process while courting buyers for the offtake.

A merger between parent company Tellurian Investment and Magellan Petroleum made Driftwood a public company earlier this year. It plans to start operating by 2022.

G2 LNG

G2 LNG stands out from the others as the only company based in Louisiana, with offices in Baton Rouge.

It received DOE approval to export to FTA countries and is awaiting non-FTA approval, which CEO Tom Hudson said he expects later this year. It’s undergoing the FERC process and expects to start operating by 2021.

G2 will occupy about 1,250 acres near the mouth of the ship channel, after a 500-acre expansion in March.

Lake Charles LNG 

Shell delayed final investment on Lake Charles LNG in August 2016, although the project has gotten approval from both FERC and DOE.

Spokesman Ray Fisher told the American Press that the move was part of a larger decision by Shell to reassess its capital projects.

Shell recently increased the terminal’s export capacity after updating its design. A review of the project is underway by Shell and other industry specialists.

Magnolia LNG 

Magnolia LNG is the only project among its peers that’s “shovel ready,” as COO John Baguley put it.

The only thing standing in its way is financing. It has all its permitting from DOE and FERC, as well as a lease on the Calcasieu Ship Channel and an environmental procurement contract. The only other company that hasn’t broken ground yet that has an EPC is Venture Global, which still has to complete the permitting process.

Magnolia’s parent company, LNG Limited, is based in Australia, another global leader in natural gas. Magnolia has a buyer for a quarter of its offtake and is busy trying to persuade global buyers to commit.

Monkey Island LNG

Monkey Island LNG recently changed its name from SCT&E LNG because of how well-received the unique name of its location, Monkey Island, has been worldwide, according to a statement sent to the American Press.

The facility is planned for about 766 acres. It hasn’t started the FERC process, but does have approval from DOE to export to FTA countries. It expects to begin operating in 2023.

Sabine Pass LNG

Cheniere Energy has shipped more than 140 cargoes to 23 countries out of its Sabine Pass facility since it began operating in 2016, putting the U.S. back on the map as an LNG export nation.

Three of its liquefaction trains are operational, with a fourth expected to reach substantial completion in the second half of 2017 and a fifth on track for the second half of 2019.

The company expects a final investment decision on a sixth and final train once it obtains an engineering, procurement and construction contract.

Venture Global

Venture Global’s Calcasieu Pass facility is still waiting on permit approvals from DOE and FERC, but, like Magnolia, it does have an EPC contract in place for construction and a buyer for part of its offtake.

Spokeswoman Jessica Wickett said construction should start in 2018 and that operations should begin in the early 2020s.

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Shell Sponsors Back-to-School Fest

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A Partnership Worth Keeping

From the oil platforms in the Gulf of Mexico to the drilling rigs in the Hayensville Shale, the oil and gas industry has played a vital role our culture, economy, and our community. It is well known in Louisiana that if you do business in our great state, you are somehow involved in the oil and gas sector.

The oil and gas industry is a key segment in Louisiana’s economy. One study suggests that our industry is responsible for 300,000 jobs and over $4 billion in contributions to state and local coffers. It is estimated that Louisiana’s oil and gas industry has an economic impact of nearly $74 billion in our great state.

The oil and gas industry has been a constant economic driver for Louisiana, providing not only jobs but valuable revenue that is used to protect and restore Louisiana coastal areas. Between January 2009 and January 2016, Louisiana collected more than $3 billion in severance taxes from wells in the coastal zone. These tax dollars are then sent to the legislature for lawmakers to decide how these fund will be appropriated for various coastal projects.

Louisiana also benefits from federal programs that rely on oil and gas revenues to fund coastal protection and restoration along the Gulf Coast. The Gulf of Mexico Energy Security Act or, GOMESA, which was signed into law by President George W. Bush in 2006, shares leasing revenues amongst the four oil and gas producing gulf-states of Alabama, Mississippi, Texas, and Louisiana. The share funds are to be used for coastal conservation, restoration, and hurricane protection. This act also stipulates that over 8 million acres be offered for oil and gas leasing. It has been estimated that Louisiana has generated nearly $140 million a year for costal projects since this legislation was enacted.

Another federal program that Louisiana has contributed to and has greatly benefitted from has been the Coastal Impact Assistance Program. This program allocates funds based on offshore oil and gas revenues. From 2007 to 2010, Louisiana has received $300 million and is set to receive another $36 million this year, all paid to coastal projects in Louisiana. These numbers are impressive, but they are just the dollars that Louisiana and the federal government has collected, not including any private investments that oil and gas companies have made here.

Over the past five years, ExxonMobil’s Baton Rouge sites have made approximately $1.4 billion in environmental investments. The Nature Conservancy, the Louisiana Coastal Protection and Restoration Authority, and Chevron have invested an estimated $1 million to build a brand new artificial oyster reef in St. Bernard Parish.  Chevron, Shell, and CITGO contributed to the   Foundation Gulf Intracoastal Waterway (GIWW) Shoreline Stabilization and Restoration Project that will create four miles of embankment along both sides of the Gulf Intracoastal Waterway in Lafourche Parish. The estimated investment of this project is $1.2 million. The list of projects that the oil and gas industry are investing in goes on and on.

While Louisiana finds itself in a continual financial tailspin from upticks in unemployment, we must provide an environment for the oil and gas industry to thrive. The state must provide a tax environment that will encourage future investment and a legal climate that doesn’t force banks and investors to look elsewhere when searching for new drilling projects. The partnership that Louisiana has with the oil and gas industry must continue, the success of us all depends on it.

Read this on LOGA’s website.

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300 organizations come together to support oil, gas royalties

Louisiana leaders are trying to make sure President Donald Trump understands how devastating the loss of offshore oil and gas royalties would be for our state.

Almost 300 businesses, local governments, economic development organizations, civic groups, ports and outdoors organizations signed on to a July 11 letter asking the president to rethink his proposal to kill the Gulf of Mexico Energy Security Act (GOMESA).

It’s an impressive list — including everyone from Brennan’s Restaurant to Women of the Storm to the Nicholls State Student Government Association and chambers of commerce and parish governments from across South Louisiana.

These groups reflect the sentiment of hundreds of thousands of Louisianians.

The letter starts by defining the problem: “Louisiana is confronting the largest land loss crisis in North America. This accelerated land loss has far-reaching economic implications and poses real threats to the Mississippi River navigation system, our nation’s largest port system, seafood industries, as well as oil and gas production and petrochemical manufacturing.”

As the letter makes clear, the devastating effects from land loss aren’t just our problem. The nation as a whole suffers when ports, energy infrastructure and fisheries are at risk.

“The Gulf of Mexico Energy Security Act will soon provide the only consistent source of federal funds dedicated to combat Louisiana’s land loss crisis. This predictable source of revenue — constitutionally committed to implementation of the State’s 2017 Coastal Master Plan for a Sustainable Coast — is critical for the communities and businesses that rely on a stable Louisiana coastline to survive and grow,” the letter says.

For decades, the federal government kept all the royalties from drilling off our shore. In December 2006, then-U.S. Sen. Mary Landrieu finally persuaded Congress to share offshore royalties on new drilling with Louisiana and other Gulf Coast states.

Louisiana has gotten only small payments since then — $102,700 in 2016. That is supposed to change in 2018, when the state expects to start getting roughly $140 million per year.

But as Louisiana, Alabama, Mississippi and Texas get closer to getting the royalty they were promised, the federal government keeps threatening to back out.

In 2015, former President Barack Obama tried to take some royalties away from Gulf states and use it on environmental projects across the country. Congress rejected the idea. Now President Trump’s budget calls for killing GOMESA. He argues that the royalties promised in the act would benefit “only a small handful of states … despite federal waters belonging to all Americans.” President Obama’s budget director said almost exactly the same thing in 2015. They are both off base.

Gulf states have borne the infrastructure and environmental costs of energy exploration for decades while the federal government kept all the royalties paid by oil and gas companies. Between 1949 and 2006, the payments to the federal treasury totaled $160 billion.

During that time, our coast has been eroding. Canals cut through Louisiana wetlands for oil and gas exploration are a key cause of erosion that destroyed 1,900 square miles of land from 1932 to 2000. Our coast has continued to erode since then.

The royalty payments Congress approved are essential to Louisiana’s ability to carry out its $50 billion, 50-year master plan to restore lost coastal land.

The letter from civic and political leaders laid out how vital the state is to the nation’s economy. Louisiana has five of the nation’s 15 largest shipping ports by cargo volume, which handle one-fifth of all waterborne commerce in the United States. Our state is responsible for $47 billion per year in oil and gas production and accounts for nearly 30 percent of the commercial fishing landings in the continental United States.

“In short, billions of dollars in jobs, essential industries, infrastructure, and flow of commerce will be at risk, along with our coastal communities, wildlife, and way of life, if the current federal legal obligation to share in the cost of coastal restoration is undermined,” the letter said.

The president ought to reconsider. If he doesn’t, Congress must make sure the royalties go to the state, as promised.

Read this article on NOLA.com.

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Power Past Impossible | API

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Program to Provide Students with STEM Knowledge

In today’s ever-changing oil and gas industry, companies search for young, qualified employees to bring the industry into the future.

In response to this industry need, the LAGCOE Future Energy Professionals Program (FEP) was established to support and encourage students to pursue the technical positions which fuel our world. The Future Energy Professionals Program includes projects to support middle, secondary, and higher education Science, Technology, Engineering, and Math (STEM) curriculum.

“FEP is an exceptional program designed to intrigue the young minds of our great community and encourage them to pursue a career that directly gives back to the Acadiana area,” said Natalie Guillot, Project Manager at SYCON International and LAGCOE Future Energy Professionals Program Co-Chair.

Since the initial project in 2013, the program has introduced the industry to more than 250 high school students interested in STEM majors through an organized tour of the expos. Junior and senior high school students from various Acadiana area schools learned the ins and outs of the energy industry while touring LAGCOE 2013 & LAGCOE 2015 with a Young Professionals of LAGCOE (YPL) volunteer and a UL Engineering Ambassador. The tours gave these students unprecedented access to a hands-on experience with the technology and mechanics of the oil and gas industry.

“The Young Professionals of LAGCOE take the time to introduce hand-selected high school juniors and seniors to multiple facets of the industry, ensuring these students that it takes a multitude of talents to make the oil and gas industry successful,” said Guillot.

This October, the LAGCOE FEP tours will take place during LAGCOE 2017. There will be a morning and an afternoon session with up to 100 students per session. Applications are currently available to high school junior or senior students from the following parishes: Acadia, Evangeline, Iberia, Jefferson Davis, Lafayette, St. Landry, St. Martin, St. Mary, or Vermilion Parishes.

“The FEP tours are open to students interested in pursuing either a 4-year or 2-year technical degrees. LAGCOE is committed to supporting programs that build a strong pipeline of future workforce, leaders and innovators for the energy industry,” said Angela Cring, LAGCOE Executive Director. “We hope this program leads to these students choosing to further their education and make a career in the energy industry.”

Students who participated in the each of the past LAGCOE FEP tours were eligible to apply for the LAGCOE Future Energy Professionals Scholarship: an award to goal-oriented students planning to enroll in a Louisiana College in pursuit of a STEM-centric Degree. LAGCOE has awarded $43,000 total scholarship dollars to date to five Acadiana-area students since 2013.

Each of these scholarship recipients were selected from a group of more than 250 students from 15 schools and eight parishes who toured LAGCOE during the 2013 and 2015 technical expositions & conferences. Again, this year, students who participate in the guided tours of LAGCOE 2017 will be eligible to apply for the Future Energy Professionals Scholarship following the tours.

For more information on the Future Energy Professionals Program, and to apply to participate in the guided tours of LAGCOE 2017, visit LAGCOE.com/future-energy-professionals.

Lauren Rabalais is marketing coordinator for LAGCOE, an energy industry nonprofit organization focused on educational programs and a technical exposition & conference, held biennially in October at the Cajundome & Convention Center. Save the Date for LAGCOE 2017: Oct. 24-26, 2017. Visit LAGCOE.com.