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Main Pass Energy Hub eyes US LNG exports from offshore Gulf of Mexico site

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Main Pass Energy Hub eyes US LNG exports from offshore Gulf of Mexico site

Main Pass Energy Hub has applied to export about 3.22 Bcf/d of gas asLNG from a proposed facility in US federal waters 16 miles offshore Louisiana.

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The project in the Gulf of Mexico will have advantages over proposedland-based export projects because it will have faster shipping times andfewer environmental concerns, John Speer, managing director at United LNG,said Monday.

MPEH is owned by Freeport McMoRan Energy and United LNG, with eachholding 50%.

The projects' floating liquefaction vessels could also be moved if theLNG market changes, Speer added. "The advantage here is that if the worldchanges, it is not going to physically be on land and trapped there," he said.

MPEH has applied to the US Department of Energy for authorization toexport LNG to countries that have free trade agreements with the US. Thecompany plans to file a separate application to export to non-FTA countriesas well.

The export project, which is slated to cost around $14 billion, isexpected to begin construction of its first vessel in 2013 and beginoperations in mid-2017, Speer said.

MPEH was authorized by the US Maritime Administration (MARAD) in January2007 to construct an offshore facility for importing LNG. At that time, itwent through a full environmental review, the application noted. Due tomarket conditions, the import project was never built, Speer said.

Since the export project would be in federal waters, it would bepermitted by MARAD, Speer said. It would be the only proposed project thatwould not have to win authorization from the Federal Energy RegulatoryCommission, he added.

The project, which would be located in 210 feet of water, would use fiveexisting interconnected platforms and three existing satellite platforms,which were previously configured for sulfur mining. These platforms are ownedby Freeport McMoRan Energy, which holds the sulfur and salt lease on MainPass Block 299.

Processing facilities would be constructed on the platforms to preparethe gas for liquefaction, Speer said. The project would also consist of sixfloating liquefaction and offloading vessels, which would cost roughly $2billion each, according to Speer.

There is also a large salt dome under the hub that could be used tostore gas and other energy products such as natural gas liquids and oil, Speersaid. The formation could store about 365 Bcf of gas, he said.

MPEH would have the potential to connect with nine major natural gaspipelines, according to the application.

--Kate Winston,
--Edited by Lisa Miller,