Exelon explores development of Texas LNG export terminal

Annova LNG filed a request with the Federal Energy Regulatory Commission (FERC) Wednesday 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 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," Ken Cornew, Exelon Generation’s president and CEO, said.

The project is contingent upon Annova successfully obtaining all necessary local, state and federal permits; acquisition of sufficient long-term customer commitments to buy LNG from the facility; and broad public support of the project in South Texas.

A decision on whether to build the facility is expected by the end of 2017. Wednesday’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.

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 FERC, the U.S. Department of Energy, the 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 Wednesday 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 V.P., 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."

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.

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