BP inks 20-year LNG export contract for Texas terminal

BP has signed a 20-year agreement to ship liquefied natural gas processed at a terminal in Freeport, Texas, which is the first of several facilities awaiting federal approvals for natural gas exports, a Freeport LNG executive announced today. The agreement would commit BP to pay for processing of 4.4 million tons of LNG per year at the Freeport LNG facility, where it would be loaded onto BP tankers and shipped abroad, Freeport LNG CEO Michael Smith tells The Houston Chronicle. “I think it sends a very strong message that a super major made this commitment,” Smith says. “It makes sense to export gas, and they want to be in one of the first facilities of its kind to be able to export gas.” BP marks the third company to sign an agreement to buy LNG exported from the facility; two Japanese companies, Osaka Gas and Chubu Electric Power, have contracted for another 4.4 million tons of LNG per year from the facility. The construction and shipping of natural gas from the Freeport site is subject to regulatory approvals, including permits that would allow for the export of LNG to countries that do not have free trade agreements with the United States, Smith says. The U.S. Department of Energy is expected to review Freeport LNG’s export permit application after Feb. 25, the company says. Houston-based Cheniere Energy was the first company to win approval to export natural gas from the continental United States, and is developing an LNG exporting facility at Sabine Pass in Cameron Parish at an estimated cost of $4.5 billion to $5 billion.