U.S. Backs Lake Charles Exports to Sell Gas Overseas

The Energy Department approved Lake Charles Exports LLC to ship natural gas from its terminal in Louisiana, the third facility the Obama administration has backed to sell to nations that lack free-trade agreements with the U.S.

The decision is a victory for gas producers that have been pressing the Energy Department to approve export terminals as hydraulic fracturing in U.S. shale rock formations pushes production to record levels.

The Energy Information Administration, which analyzes data for the U.S., forecasts gas production will increase to about 70 billion cubic feet a day this year from 69 billion in 2012.

Pending environmental reviews, the Lake Charles facility will be able to export 2 billion cubic feet of gas a day for 20 years, the department said today in a statement.

Lake Charles Exports is a jointly owned subsidiary of BG Group Plc (BG/) based in London and Southern Union Co., which was acquired in 2012 by Dallas-based Energy Transfer Equity LP (ETE) for $5.4 billion.

The Industrial Energy Consumers of America, a manufacturing group based in Washington, had asked the Energy Department to reject the application, saying exports will raise domestic prices for the fuel.

Exports from the Lake Charles terminal will provide “net economic benefits” to the U.S., the department said.

The U.S. has previously approved liquefied natural gas exports from the Sabine Pass LNG Terminal in Cameron Parish, Louisiana, and the Freeport LNG Terminal in Quintana Island, Texas. About 19 applications are pending at the department.

The development of natural gas is “having a transformative impact on the U.S. energy landscape,” the Energy Department said in a release.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

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