San Diego Business Journal

Sempra Energy’s massive liquefied natural gas project in Louisiana obtained approval from the Federal Energy Regulatory Commission last week, one of the final steps before the company starts construction later this year.

Sempra said the total cost for the plant that transforms natural gas to its liquid form so it can be exported will be $9 billion to $10 billion. An earlier estimate of $6 billion provided two years ago didn’t include capitalized interest and other financing costs, said Paty Mitchell, a spokeswoman for Sempra International.

Sempra is a majority partner on the project with three international companies, affiliates of GDF Suez S.A., a French company; and two Japanese entities Mitsubishi Corp. and Mitsui & Co. Each of the three partners own 16.6 percent in the subsidiary called Cameron LNG, while Sempra owns 50.2 percent.

Export Plans

Sempra Chairman and CEO Debra Reed said the Cameron project will create economic prosperity and thousands of jobs in Louisiana. “Today’s approval is another important step in delivering natural gas to America’s trading partners abroad.”

Once it’s operational in 2018, the plant will have the capability of exporting about 1.7 billion cubic feet of liquefied natural gas daily, or about 12 million tonnes annually, Sempra said. The Federal Energy Commission also approved building a 22-mile expansion of 42-inch pipe to existing facilities to move the gas to the plant. The work is to be done by a subsidiary of Sempra.

This year, Congress has expedited approvals on natural gas export plants which are targeting European customers. The idea is to reduce those nations’ reliance on natural gas supplies coming from Russia, particularly after it annexed Ukraine’s Crimea region, according to a Bloomberg report.

In order for the Cameron plant to export to Europe and Japan, which are nonfree trade nations, Sempra had to obtain permission from the U.S. Department of Energy. The permit was received earlier this year.

$8.6 Billion Yearly

“The liquefaction project is an international collaboration with our partners from Japan and France to create a world-class facility to deliver reliable LNG supplies for more than 20 years to some of the largest LNG buyers in the world,” said E. Scott Chrisman, vice president of commercial development for Sempra LNG and project leader for the Cameron project.

According to the Cameron LLC website, the project will export an average of about $8.6 billion in LNG annually.

The project will create an average of 1,300 design, engineering and construction jobs at the Louisiana site over the next four years, during a peak 12-month period, about 3,000 direct jobs are expected to be created, along with hundreds of other indirect jobs from the project, according to the Cameron website.

The LNG plant will employ 140 full-time workers once it begins production, and an additional 45 employees at Cameron LNG’s headquarters office in Houston, Mitchell said.

Cheniere Energy Inc. is building another LNG plant in Louisiana at Sabine Pass, and other LNG facilities are planned for Texas and Maryland.