Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Foreign Companies Join in U.S. Project to Export Natural Gas Planned Louisiana Plant Gets Japanese, French Investments

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Foreign Companies Join in U.S. Project to Export Natural Gas Planned Louisiana Plant Gets Japanese, French Investments

Article excerpt

LONDON -- In a sign that the United States shale gas boom is making global waves, two Japanese conglomerates and a big French energy player signed agreements Friday to invest as much as $7 billion in a liquefied natural gas project in Louisiana.

The companies -- Mitsui and Mitsubishi of Japan and GDF Suez of France -- each plan to take a 16.6 percent stake in the gas export plant being developed at Hackberry, La. The complex is being built by Sempra Energy, a San Diego-based company with annual revenue of about $10 billion. The companies agreed last year to help develop the project.

GDF Suez predicts that the plant will begin operations in 2017. It said the companies' final decision to make their investment will depend on the project's receiving necessary permits.

International companies -- responding to a ravenous global appetite for natural gas, particularly in Japan and Europe --want access to shale gas from the United States, which has emerged as an important new source over the past few years. But because the United States has only recently shifted from being a gas importer to being self-sufficient in the fuel, the government has not yet agreed to allow exports, except in a few cases and to the 20 nations with which it has free-trade agreements, including Panama and Costa Rica.

Export approval, under Energy Department consideration for several projects, will be necessary before the potential of shale gas can be realized fully. On Friday, the department approved a Texas project called Freeport LNG. It has also signed off on a facility being built by Cheniere Energy at Sabine Pass in Louisiana that is expected to start exporting in 2015.

But international companies are investing all the same, betting that U.S. shale gas will eventually be able to go onto the global market.

In a statement, Sempra Energy estimated that the foreign partners would be putting up $6 billion to $7 billion, in return for just under half the equity in the project, which is forecast to yield 12 million metric tons of liquefied natural gas annually for 20 years. In return, they will receive all the gas. …

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