Site clearing has started on the new Golden Pass LNG terminal. The facility will employ more than 1,000 workers at peak construction activity. ( Photo courtesy Golden Pass LNG LLC)

Golden Pass LNG LLC awarded a contract to CB&I, The Woodlands, Texas, for a new $1-billion liquefied natural gas terminal near Sabine Pass. The new terminal is expected to add about 2 billion cu ft per day to the U.S. LNG market after completion in 2009.

CB&I's work includes the engineering, procurement and construction of facilities. Site preparation is under way and CB&I expects to begin hiring craft labor shortly.

Golden Pass LNG is the owner of the Golden Pass LNG terminal. About 70 percent will be owned by an affiliate of Qatar Petroleum, with ExxonMobil and ConocoPhillips each owning a share in the balance of the interest.

According to the Federal Energy Regulatory Commission, about 40 LNG terminals are either before the FERC or being discussed by the LNG industry for North America. Four terminals are currently operating in the lower 48 states, a fifth in Alaska and a sixth serves Puerto Rico.

“The U.S. consumes about 64 billion cu ft per day of natural gas,” says Bill Cooper, executive director for the Center for Liquefied Natural Gas. “About 2.5 percent comes from LNG. We expect that to grow to 16 percent.”

Many industry analysts predict that only 12 of the 40 LNG terminals being considered will be built. The National Petroleum Council estimates seven to nine new LNG terminals will be built over the next decade.

“Seven to nine is a loose estimate,” Cooper says. “It could be 10, five, whatever the market mandates or can stand.”

“LNG as a part of the overall energy mix is becoming more important and is increasing,” says Bob Davis, spokesperson for Golden Pass LNG.

“The Golden Pass terminal will have the capacity to process 15.6 million tons a year of LNG,” says Bruce Steimle, spokesperson for CB&I. “That’s the equivalent of approximately 2 billion cu. ft. of natural gas per day.”

“That’s significant,” Cooper says. “Especially if you consider that the operational capacity for the lower 48 states is in the neighborhood of 4.5 billion cu. ft. per day.”

The terminal itself will import LNG from Qatar. LNG is made when natural gas is chilled to 260° F. The volume of the natural gas then liquefies to a volume of 1/600 compared to its gaseous form. When it is reduced to 600 times, it can be economically transported.

The project includes the construction of two ship unloading berths, five full-containment storage tanks, vaporization facilities, gas send-out and ship unloading systems. Once the terminal is operational, it will employ about 75 people and will receive a tanker every two to three days.

Next year construction will begin on a 70-plus-mile-long pipeline that will extend from the terminal site to a gas sales and metering center in Starks, La.

At its peak, the project is expected to employ more than 1,000 construction workers and create job opportunities for local subcontractors, suppliers and laborers.

“The impact on local businesses, subcontractors and suppliers will be substantial,” says Steimle. “Globally, the project represents the development of a key LNG supply source for the U.S.” 

“Today the U.S. demand is outstripping our domestic natural gas supply and imports we receive from Canada,” says Cooper. “It’s projected that the trend will continue, and in fact the gap will widen. The way to fill that gap is with LNG. It will play a major role in meeting demands for natural gas in the future.”

Sabine Pass is south of Port Arthur, Texas, on the Gulf of Mexico at the Louisiana border. The area, known as the Golden Triangle, was hard hit last year by Hurricane Rita, which plowed through the area ripping down power lines, damaging homes and business and flooding refineries.

“The EPC is more than $1 billion and encompasses a three-year construction period,” Davis says. “It will provide a needed economic infusion into the Golden Triangle.”

The LNG, liquefied in Qatar, will be transferred to tankers and transported across the ocean into the Gulf of Mexico. The vessels will berth at the terminal, where the liquefied gas is regasified back into natural gas. It can then be put into a pipeline and transported where it’s needed.

“That’s the beauty of LNG,” Davis says.