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Construction at the first liquefied natural gas export facility to be built in the US for more than 40 years is set to start within three months, the chief executive of the company behind the project has said, after it secured its final approval from the US energy regulator.
Charif Souki, the chief executive of Cheniere Energy which is developing the project, told the Financial Times: “This is the beginning. It is the dawn of the global significance of North America as a gas exporter.”
Sabine Pass, on the Gulf of Mexico coast straddling the Texas-Louisiana border, will cost $10bn and is the first LNG export facility in the “lower 48” states, those excluding Alaska and Hawaii. It is being built to take advantage of cheap natural gas from the boom in US shale, which can be sold at much higher prices in international markets. The plant has attracted huge global interest as a way for other countries to tap into the US shale gas revolution. This has created an abundant supply of gas and resulted in dramatic falls in prices in the US thanks to advances in the techniques of horizontal drilling and hydraulic fracturing or “fracking”.
Cheniere has already signed deals with BG Group of the UK, Gas Natural Fenosa of Spain, Gail of India and Kogas of Korea to take a total of 16m tonnes of LNG per year, equivalent to about 89 per cent of Sabine Pass’s planned maximum capacity.
Mr Souki said that he expected Sabine Pass to deliver its first LNG cargo, to BG, late in 2015.
The company still needs to finalise the financing for the $4.5bn-$5bn cost of phase one of the project, the first two of four planned “trains”, as the gas liquefaction production lines are called. It said on Monday that it had signed up eight banks, including JPMorgan, Morgan Stanley, RBC and Credit Suisse, to help structure $4bn of debt facilities.
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