Exxon Mobil Corp. (XOM), the largest energy company by market value, signed an agreement with Qatar Petroleum International to move forward with construction of a $10 billion natural gas export terminal in Texas.
The project will involve installing liquefaction equipment at an existing import facility in Sabine Pass, Texas, according to an e-mailed statement today from Golden Pass Products LLC, a subsidiary formed by the two companies. It won permission last year to export the fuel to nations with free-trade agreements with the U.S. and is awaiting approval to send the fuel to all other countries.
Exxon, based in Irving, Texas, and state-owned Qatar Petroleum plan to ship as much as 15.6 million metric tons of gas annually from the Golden Pass facility, according to the statement. A boom in U.S. production has spurred several proposals to export the fuel, which is cooled to liquid form at -260 degrees Fahrenheit (-162 Celsius) to reduce volume and allow for transportation by ship.
“This agreement sets out a highly competitive commercial blueprint for Golden Pass Products, with a commitment that builds on the unique combined strengths of QPI and Exxon Mobil through the the global downstream LNG value chain,” Bill Collins, president of Golden Pass, said in the statement.
Exxon has been expanding its worldwide gas portfolio with acquisitions such as the 2010 purchase of XTO Energy in the U.S. and investments in projects that include the A$52 billion ($52 billion) Gorgon LNG complex in Australia. Gas accounted for half of Exxon’s global production during the first three months of this year.
U.S. liquefied natural gas import facilities have been operating below capacity as a glut of domestic gas from shale formations erased demand for foreign supplies. The import terminal at Golden Pass began operations in 2010.
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