Exelon plans application for LNG export project in Texas

Add Exelon (NYSE:EXC) to the list of companies interested in developing a facility to export liquefied natural gas (LNG).

Houston-based Annova LNG, LLC filed a request with the Federal Energy Regulatory Commission (FERC) 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 said in a news release.

Exelon Generation is the majority owner of the Annova LNG Brownsville Project. Exelon acquired the rights to Annova in the summer of 2014.

The project represents a potential opportunity to diversify Exelon’s role in the energy business in an area that shows strong growth potential: natural gas exports,” Exelon Generation President and CEO Ken Cornew said.

“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,” Cornew said.

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.

“Brownsville is an ideal location for this potential facility,” said Annova President David Chung, who also serves as vice president, 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.

Construction of the project would support an average of 675 on-site jobs over a four-year period, which translates to approximately $324m in direct labor income for Texans, according to an Ernst & Young economic analysis completed in February 2015.  Once operational, the facility would employ about 165 workers at an average salary of about $70,000 a year, Exelon said.

To develop the LNG project to its full-scale could represent a $2.9bn investment, an Exelon spokesperson told GenerationHub March 11. Exelon has made a pre-filing with FERC and expects to make the full filing in late 2015 or 2016, the spokesperson said.

Liquefied natural gas, or LNG, is natural gas that has been cooled until it becomes a liquid, making it easier and more efficient to store and ship. 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.

Exelon is one of the largest competitive U.S. power generators, with approximately 32,500 MW. Exelon is well-known for the nation’s largest nuclear fleet but also has much natural gas-fueled generation, including Colorado Bend and Wolf Hollow units now under construction in Texas.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.