BG and Trunkline Agree to Upgrade Lake Charles LNG Terminal

BG LNG Services, a wholly owned subsidiary of BG Group, has entered into an agreement with Trunkline LNG, a wholly owned subsidiary of Southern Union Company, to upgrade the Lake Charles, La., liquefied natural gas (LNG) terminal and to extend its terminal services contract for an additional five years to 2028.

The facility upgrade, which is being constructed by Trunkline, will allow the terminal to extract heavier hydrocarbons, such as butane, propane and ethane from the LNG, thus allowing the terminal to source LNG with a wide range of suppliers while meeting US pipeline specifications.

The upgrade will also provide for the installation of ambient air vaporization, which uses the temperature of the air to warm the LNG and return it to its gaseous state, reducing fuel usage and air emissions. The project was filed with the US Federal Energy Regulatory Commission (FERC) for approval on March 31. The terminal upgrade is expected to be completed in 2008.

The extension of the contract for the long-term entry capacity guarantees that BG will have rights to 100 percent of the terminal's existing capacity. BG's current rights provide for 1.2 billion cubic feet per day (bcf/d) of send-out capacity, which is being expanded to 1.8 bcf/d, with peaking capacity of 2.1 bcf/d and will be ready during the second quarter of 2006. This is in addition to BG's storage capacity of 9.0 bcf.

"The United States is one of our core markets," said Martin Houston,BG Executive Vice President and Managing Director,North America, Caribbean and Global LNG. "This project provides BG with the option of supplying the market from a wider variety of LNG sources, thus increasing not only long-term supply reliability for our downstream customers, but also increased flexibility for the world's LNG sellers."