Ex­porters jockey for po­si­tion in LNG race

Aus­tralian com­pany post­pones its move to Hous­ton

Houston Chronicle - - BUSINESS - By Jordan Blum

Aus­tralia’s LNG Ltd. is de­lay­ing its an­tic­i­pated move to Hous­ton as well as plans to trade its shares on U.S. stock ex­changes as it fo­cuses on de­vel­op­ing its liq­ue­fied nat­u­ral gas ex­port project near Lake Charles, La.

LNG Ltd. is among the com­pa­nies launch­ing so-called nextwave LNG projects that are ex­pected to get un­der­way soon and be­come op­er­a­tional early in the next decade, when LNG de­mand and prices are ex­pected to rise. Its next-wave ri­val, Nex­tDecade of The Wood­lands and Tel­lurian of Hous­ton, be­came pub­licly traded com­pa­nies ear­lier this year.

Both the chief ex­ec­u­tive and the chair­man of LNG Ltd. are al­ready based out of Hous­ton, and the com­pany said it’s only a mat­ter time be­fore it for­mally moves its head­quar­ters from Aus­tralia, where its shares now trade on that coun­try’s stock ex­change. CEO Greg Ve­sey said he’s fo­cused on ac­quir­ing the nec­es­sary fi­nanc­ing and con­tracts by mid-2018 to com­mence con­struc­tion on the Mag­no­lia LNG project in Louisiana so it can be com­pleted by 2022.

Paul Cav­ic­chi, the com­pany’s chair­man, said LNG Ltd. re­mains “com­mit­ted to bring­ing the com­pany to the U.S. mar­ket at an ap­pro­pri­ate time best suited to max­i­mize in­vestor value. A U.S. list­ing is the right step for LNG, but we must en­sure we pro­ceed de­lib­er­ately and re­main at­ten­tive to all share­holder ex­pec­ta­tions.”

LNG Ltd.’s ri­vals, mean­while, con­tinue to make moves to po­si­tion them­selves for the pro­jected pickup in the LNG mar­ket.

Nex­tDecade said this month it just se­cured county tax breaks for its Rio Grande LNG ex­port project in Texas near Brownsville, which it aims to open in 2022.

Mean­while, Tel­lurian, which is de­vel­op­ing the Drift­wood LNG ex­port project near Lake Charles, re­cently ac­quired Hay­nesville shale gas acreage in Louisiana for $85 mil­lion to gen­er­ate its own nat­u­ral gas for LNG pro­duc­tion and ex­port.

Tel­lurian, which is chaired by Che­niere En­ergy founder and LNG ex­port pi­o­neer Charif Souki, plans to sell about 60 per­cent of the eq­uity stake in the Drift-

wood project to help raise the fi­nanc­ing to get Drift­wood off the ground.

The first wave of LNG ex­port projects started with Che­niere’s Sabine Pass ter­mi­nal in Louisiana, which re­mains the only project up and run­ning. Next up are Do­min­ion En­ergy’s Cove Point project in Mary­land and then Hous­ton­based Kin­der Mor­gan’s Elba

Is­land ter­mi­nal in Ge­or­gia.

A slew of Texas and Louisiana projects should come on­line in 2019 with Hous­ton’s Freeport LNG ter­mi­nal, Che­niere’s Cor­pus Christi project and Sem­pra En­ergy’s Cameron LNG project in Louisiana near the Texas state line.

LNG Ltd., Nex­tDecade and Tel­lurian are among the com­pa­nies try­ing to lead the sec­ond wave of LNG ex­port­ing af­ter 2020.

Much of the com­pe­ti­tion comes from LNG­ex­port­ing na­tions such as Aus­tralia and Qatar. Chevron’s $34 bil­lion Wheat­stone LNG ex­port project just came on­line ear­lier this week in Western Aus­tralia.

jordan.blum@chron.com twit­ter.com/jd­blum23

LNG Ltd.

A ren­der­ing shows the $4.3 bil­lion Mag­no­lia LNG project that LNG Ltd. plans to build on 115 acres south of Lake Charles, La., along the Cal­casieu Ship Chan­nel.

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