BP Plc. (LON: BP) has entered into an agreement with Freeport LNG Expansion, L.P. to export 4.4 million tons of liquefied natural gas annually from Freeport’s terminal in Texas.
The deal is for 20 years, and it allows BP to join the ranks of Royal Dutch Shell Co. (NYSE: RDS.A), Exxon Mobil Corp. (NYSE: XOM), and Total SA (NYSE: TOT) in seeking export arrangements for the ever-increasing reserves of American shale-produced natural gas, as Bloomberg reports.
Freeport also has similar export agreements, signed last year in July, with Osaka Gas Co. Ltd. (TYO: 9532) and Chubu Electric Power Co. (TYO: 9502), also for 4.4 million tons annually.
The deal takes effect after Freeport’s second production train has completed development. The Freeport terminal in Texas is one of about 20 such terminals currently seeking export permits to process nearly 31 billion cubic feet each day.
“With the first two liquefaction trains of the project fully contracted, we intend to approach the financing markets imminently so that we can begin construction on the initial two- train facility as soon as we receive Federal Energy Regulatory Commission approval,” said Michael S. Smith, chief executive officer of Freeport LNG.
Just last month, Royal Dutch Shell Co. and Kinder Morgan Inc. (NYSE: KMI) disclosed their intentions of forming a company specifically to export LNG from a location near Savannah, Georgia.
The U.S. Energy Department has already signed off on that location with the requirement that the target countries have existing free-trade agreements with the U.S.
France’s Total has developed an arrangement with Cheniere Energy Inc.’s (NYSE: LNG) Sabine Pass terminal, while Exxon is interested in the Golden Pass terminal in Texas.