Chevron Seeks OK to Build Plant

Chevron Corp., the second-largest U.S. oil company, said Thursday that it asked federal regulators to approve construction of a natural gas import terminal on the Mississippi coast to capitalize on rising U.S. fuel demand.

The plant would be next to the company’s Pascagoula refinery and would initially be able to process 1.3 billion cubic feet of natural gas a day, San Ramon, Calif.-based Chevron said. The company didn’t say how much the plant would cost. Construction could begin in 2007, Chevron spokeswoman Nicole Hodgson said.

The Chevron proposal is among dozens of projects chasing a share of the market for natural gas imports, which the Energy Department predicts will more than quadruple by 2010. U.S. gas futures have almost tripled in the last two years and are trading near a record high.

“This project can help meet the projected increase in demand for energy in the United States,” said John Gass, president of Chevron Global Gas.

Chevron said the plant, called Casotte Landing, would process imported liquefied natural gas for industrial, commercial and residential users in the Southeast. The company’s proposal to build and operate the plant was filed with the Federal Energy Regulatory Commission.

Chevron Chief Executive David O’Reilly in February said the company suspended plans for an $800-million liquefied natural gas project, called Port Pelican, off the Louisiana coast. He said the company hadn’t decided where the gas would come from and hadn’t determined whether the Port Pelican location was optimal. The company also has deferred work on a gas terminal near Corpus Christi, Texas, according to a report by Lloyd’s List.

Chevron also said Thursday that it restarted its 325,000-barrel-per-day Pascagoula refinery, which was damaged by Hurricane Katrina, and could have it back to normal operation by the end of this month, ahead of earlier estimates.

Shares of Chevron fell $2.04 to $60.