Chevron Wins OK for LNG Terminal

ChevronTexaco Corp., the second-largest U.S. oil company, said Monday that it had received government approval to construct the first U.S. offshore terminal for imports of liquefied natural gas.

The company, based in San Ramon in the Bay Area, said that the Port Pelican project would be about 40 miles off the coast of Louisiana and estimated that it would cost more than $800 million.

The terminal will have a capacity of 1.6 billion cubic feet of gas a day and connect with ChevronTexaco’s pipeline network in the Gulf of Mexico.

Prices for natural gas have soared about 80% in the last two years, making it more profitable to process and transport gas in liquid form in refrigerated tankers from overseas fields.

Competitors including Sempra Energy of San Diego and Royal Dutch/Shell Group have LNG projects in the works, as leading energy companies continue efforts to deliver gas to the Lower 48 states by pipeline from Alaska.

U.S. imports of LNG, which accounted for about 1% of domestic gas demand last year, may reach about 1.42 billion cubic feet a day this year, more than double the 2002 total of 627 million, said Damien Gaul, an economist at the U.S. Energy Information Agency.

“Port Pelican is a key element of our LNG strategy and provides a viable solution to commercialize our natural gas resources,” John Gass, president of ChevronTexaco Global Gas, said.

Shares of ChevronTexaco fell 67 cents to $73.60 on the New York Stock Exchange. The announcement was made after the close of regular trading.

Projects already approved or awaiting authorization would boost U.S. LNG import capacity to 13.9 billion cubic feet a day by 2008. Import capacity currently stands at about 3.2 billion cubic feet a day, Gaul said.

The Federal Energy Regulatory Commission has approved Sempra’s application to build the first new onshore LNG terminal in the continental United States in 25 years. Its $700-million Cameron LNG terminal in Louisiana will have a capacity of 1.5 billion cubic feet a day.

ChevronTexaco is seeking Mexican regulatory approval for a second terminal off the coast of Baja California.

Shell, Europe’s largest oil company, and BHP Billiton Ltd. of Australia have announced plans for offshore terminals that would add 2.5 billion cubic feet a day of import capacity.

There currently are four operating LNG terminals in the United States, at Everett, Mass.; Lake Charles, La.; Cove Point, Md.; and Elba Island, Ga.