Exxon Mobil Corporation (NYSE:XOM) and Qatar Petroleum International plan to build a $10 billion liquefied natural gas (LNG) plant in Texas, according to the report of Joe Carroll of Bloomberg.
The construction of the LNG plant includes the installation of liquefaction equipment at an existing import facility located in Pass Texas. Golden Pass Products LCC, a subsidiary created by Exxon Mobil Corporation and Qatar Petroleum International, confirmed the information in an e-mailed statement.
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The two companies obtained a permit last year to ship LNG to different countries with free-trade agreement with the United States, but they are still waiting for the approval to export LNG to non-free trade agreement countries from the Department of Energy (DOE), and to receive a permit from the Federal Energy Regulatory Commission (FERC) to be able to proceed with the construction of the proposed LNG plant.
Exxon Mobil Corporation (NYSE:XOM) and Qatar Petroleum International aims to ship as much 15.6 million tons of LNG per year through the facility operated by Golden Pass Products.Exxon and Qatar Petroleum’s commercial framework agreement to sell the proposed gas volumes at Golden Pass facility is not a final investment decision. They need to obtain the required permits from the DOE and FERC.
The proposal to export the fuel was driven by the production boom in the United States. LNG is produced by chilling gas to liquid form at -260 degrees Fahrenheit or -162 degrees Celsius and shrinking its volume by 600 times, which allows the fuel to be shipped in other countries.
In a statement, Bill Collins, president of Golden Pass Products said, “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 global downstream LNG value chain.”
Exxon Mobil Corporation (NYSE:XOM) is the largest energy company by market value, and it it is expanding its gas portfolio worldwide through acquisitions. In 2010, the company acquired XTO Energy, and invested in various projects such as the Gorgon LNG complex in Australia with $52 billion worth of investments.
The company also partnered with BHP Billiton plc (NYSE:BBL) (LON:BLT) to anchor a floating LNG vessel extending 495 meters at sea into the remote Scarborough natural gas field offshore Western Australia.
Exxon Mobil Corporation (NYSE:XOM) and Qatar Petroleum International signed the memorandum of understanding (MOU) in Berlin yesterday. Their main objective is to explore unconventional gas resources in North America and global LNG resources. The agreement also aims to address the evolving and increasing demand for gas worldwide.
Gas accounted 50 percent of the global production of Exxon Mobil Corporation (NYSE:XOM) in the first quarter this year.