Exelon Generation to Explore Development of LNG Export Terminals in Texas
KENNETT SQUARE, PA — Houston-based Annova LNG, LLC today filed a request with the Federal Energy Regulatory Commission to initiate a review of the potential development of a mid-scale natural gas liquefaction and transfer facility at the Port of Brownsville, Texas. Exelon Generation is the majority owner of the Annova LNG Brownsville Project.
"The project represents a potential opportunity to diversify Exelon's role in the energy business in an area that shows strong growth potential: natural gas exports," Exelon Generation President and CEO Ken Cornew said.
"Exploring LNG exports is a natural evolution of Exelon's diversification strategy," Cornew said. "The U.S. offers some of the most competitive supplies of natural gas in the world, and this project provides Exelon an opportunity to continue the growth of our wholesale gas businesses."
The project is contingent upon Annova successfully obtaining all necessary local, state and federal permits; acquisition of sufficient long-term customer commitments to buy liquefied natural gas from the facility; and broad public support of the project in South Texas. A decision whether to build the facility is expected by the end of 2017. Today's filing marks the beginning of the projected two-year permitting process.
If built, the LNG terminal would sit beside the Brownsville Ship Channel on 650 acres designated by the Port of Brownsville for industrial use. The proposed site is about eight miles from the Gulf of Mexico in Cameron County, Texas. The facility would be operational by 2020.
Construction of the project would support an average of 675 on-site jobs over a four-year period, which translates to approximately $324 million in direct labor income for Texans, according to an Ernst & Young economic analysis completed in February 2015. Once operational, the facility would employ about 165 workers at an average salary of about $70,000 a year.
Liquefied natural gas, or LNG, is natural gas that has been cooled until it becomes a liquid, making it easier and more efficient to store and ship. A "mid-scale" LNG terminal serves a niche market of customers needing smaller LNG deliveries for reasons such as smaller port facilities or lower import requirements.
The project requires 26 federal, state and local permits and licenses, including approvals from the Federal Energy Regulatory Commission, U.S. Department of Energy, U.S. Army Corps of Engineers, and the U.S. Fish and Wildlife Service, as well as various construction-related permits. The paperwork filed with FERC today was a formal notification that Annova intends to pursue permitting and licensing of the project.
"Brownsville is an ideal location for this potential facility," said Annova President David Chung, who also serves as vice president, LNG, for Exelon Generation. "If we move forward, the project will be built with private funds, not taxpayer dollars and will provide a significant economic boost to the region. Since its resurgence in the 1960s, LNG operators have amassed 60 years of safe transportation and operational experience worldwide with little or no impact to the general public. Annova LNG and Exelon Generation are committed to a consistent, long-term relationship with the community that emphasizes clear facts and inclusiveness throughout the life of this potential facility."
The proposed site could accommodate three stages of development, with each capable of producing two million tons of LNG a year for at least six million tons annually when complete.