USA: GE Energy Financial Services Invests in New LNG Terminal

Stamford-based GE Energy Financial Services, a key player in funding alternative energy projects, has not abandoned core energy sources, investing $150 million in a liquefied natural gas terminal under construction on the Mississippi Gulf Coast.

GE EFS has acquired Houston-based investor Crest Group’s 30 percent interest in the $1.1 billion Gulf LNG (liquefied natural gas) Energy terminal, expected to be completed late next year with the goal of increasing natural gas supplies to the Northeast and Southeast.

The terminal, adjacent to the Bayou Casotte Ship Channel in Pascagoula, will receive, store and “re-gasify” imported, liquefied natural gas.

LNG is natural gas that is cooled to minus 260 degrees and condensed into a liquid. The process reduces the fuel’s volume, making it more economical to ship from countries with natural gas surpluses.

Under construction are two 160,000-cubic-meter liquid storage tanks with a combined capacity of 6.6 billion cubic feet of gas, 10 vaporizers and connections to the Gulfstream, Destin, Florida Gas Transmission and Transco pipelines.

The project has secured 20-year service agreements with major oil and gas companies to supply LNG for all of the terminal’s capacity. In addition to GE Energy Financial Services, the terminal’s owners are a subsidiary of El Paso Corp., which is managing construction and will operate the facility, and Sonangol, Angola’s state-owned national oil company.

The project’s owners expect that once operational, the terminal will offer up to 60 full-time jobs. “Our investment in an asset that will form part of the nation’s energy backbone reflects our strategy of supporting growing businesses, helping to meet energy demand and drawing on the pillar of GE’s strength and expertise in energy,” said Dan Castagnola, a managing director of GE Energy Financial Services in Houston.

“Representing our expansion into LNG, this transaction complements our investment in U.S. natural gas pipelines — 30,000 miles of pipelines in North America — that help ensure a steady supply of clean, efficient energy.” In February, the unit announced that it formed a partnership with Marlin Energy LLC to acquire West Texas natural gas reserves, and another partnership with Sequel Energy LLC to acquire oil and gas reserves in North Dakota, for a total investment of $200 million.

Natural gas prices have plummeted from $13.69 per 1000 cubic feet in July 2008 to around $4 per 1000 cubic feet as new technology is allowing easier extraction of natural gas from shale from U.S. sites.

That and the slow economy has created a glut on the market and less demand for imported LNG, said Tom Biracree, senior financial editor with IHS Herold Inc., a Norwalk independent research firm focusing on the global energy industry.

GE needs to consider the terminal as a long-term investment, Biracree said. “There’s no screaming need for it right this minute, but when world demand grows again, then we’re going to be grateful that we have access to LNG,” said energy analyst Peter Beutel, president of Cameron Hanover Inc. in New Canaan.

[mappress]

Source:  stamfordadvocate, May 7 , 2010;