CEO Tells Platts Energy Week: U.S. LNG Export Application Process Satisfactory


Also Sunday: Response to Ex-NRC Chairman’s Comments on Nuclear Reactors and More


Washington - April 15, 2013


The U.S. Department of Energy’s (DOE) processing of liquefied natural gas (LNG) export applications appears to be working well, according to Cheniere Energy CEO Charif Souki, who appeared on on Platts Energy Week, an all-energy news and talk television program. Cheniere Energy is the only U.S. company with full government authorization to export LNG outside of Alaska.


“It's a cumbersome process and it's something they never expected," Charif Souki, CEO of Cheniere Energy, said of the surge in opportunities to export LNG, thanks to the shale-gas windfall in the U.S.


"They've been very diligent about trying to understand what the situation was, what the implications are, what the rules are," Souki said. "Those are 40-year-old rules. All of us had to take them out, brush them out and take a look at what we can do. It took us a while."


Houston-based Cheniere has begun construction on two of six planned processing units – or trains – at its Sabine Pass LNG terminal, which is located on the Sabine Pass River in Louisiana. The company expects to begin construction on two more trains this year, and it has filed applications with the Federal Energy Regulatory Commission and DOE to build and ship LNG from an additional two trains.


So far, Cheniere has signed up customers in Europe and Asia to buy LNG, but not from Japan, whose appetite for LNG has grown substantially, especially since the nation closed virtually all of its nuclear reactors in response to the 2010 Fukushima disaster.


"I've been to Tokyo to talk to various utilities and the government," Souki said. "They just didn't move as fast as the others."


Souki said U.S. LNG is likely to shake up world LNG markets, which base natural gas prices on those of oil.


"It is adding liquidity, a new mechanism that is based on gas prices as opposed to oil prices," he said. "Those are very, very new features for the global gas markets. And it's helping the rest of the world develop a pricing mechanism that is actually relevant to gas prices as opposed to oil prices."


While Cheniere has the lead in bids to ship LNG from the U.S., two other companies, Freeport LNG Development in Texas and Dominion Cove Point LNG in Maryland are not that far behind, based on the status of their applications with the government and their contracts with foreign customers, Souki said.


U.S. law requires DOE to quickly approve applications for LNG exports to countries with which the U.S. has a free trade agreement (FTA). But DOE is required to consider various economic factors in deciding on exports to non-FTA countries, which include Japan. And that process has been bogged down as the agency commissions studies and some lawmakers question the appropriateness of exporting LNG.


DOE is considering 16 applications to non-FTA countries.


Other Program Highlights


James Acton, a nuclear policy specialist with the Carnegie Endowment for International Peace, and Branko Terzic, head of the Deloitte Center for Energy Solutions, discussed comments made recently by Gregory Jaczko, former chairman of the U.S. Nuclear Regulatory Commission (NRC), who said all 104 nuclear power reactors in the U.S. are fundamentally flawed and should be phased out.


Also on the show, Western Energy Alliance President Tim Wigley responded to a hydraulic fracturing poll the alliance commissioned and explained the implications for drillers.


During Sunday’s “Market Spotlight” segment, Platts Associate Editor Leticia Vasquez looked ahead to what summer may bring for gas prices as warmer weather approaches.


Platts Energy Week airs on Sundays in Washington on WUSA, a CBS affiliate, and in Houston on KUHT, a PBS affiliate, as well as on other PBS stations in the U.S. The program is also available on the web at www.plattsenergyweektv.com.


Platts Energy Week airs at 7:30 a.m. U.S. Eastern time Sunday mornings on W*USA TV 9 in greater Washington, D.C., in Houston at 1:30 p.m. U.S. Central time on KUHT HoustonPBS (Channel 8), at 3:30 p.m. CT on San Antonio, Texas’ PBS-KLRN, and in North Carolina at 5:30 p.m. ET on North CarolinaPBS (digital channel UNC-MX). The program also airs Tuesdays at 6:00 p.m. ET in North Carolina on PBS (digital channel UNC-MX), and is available on other PBS stations throughout the United States. For online viewing, the program is accessible at www.plattsenergyweektv.com.


The program follows an interview format featuring guests from the energy industry Obama administration, Congress, government agencies, think tanks, and the investment community. Host Bill Loveless is the long-time editor of Platts’ Inside Energy and brings nearly three decades of energy journalism experience to the anchor chair.


Platts Energy Week is produced by Platts, the world’s leading source of information and intelligence on energy and related commodities and a division of The McGraw-Hill Companies [NYSE: MHP], and W*USA-TV, the Washington, D.C., CBS affiliate and flagship television station of Gannett Company. [NYSE: GCI]. While the program is US focused and produced in Washington, it reflects the global vantage point of Platts, whose correspondents are stationed in such major capitals as London, Dubai, Singapore, Tokyo and Moscow.


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