DNR Secretary Angelle Hails Potential Economic Impact of Cheniere Energy Investment
Louisiana poised to benefit from opening of new natural gas markets
BATON ROUGE – Louisiana Department of Natural Resources (DNR) Secretary Scott Angelle today joined Gov. Bobby Jindal in hailing the official announcement of Cheniere Energy’s planned investment of $6 billion to convert its existing Sabine Pass import terminal in Cameron Parish into a natural gas liquefaction facility with the capability of both importing and exporting Liquefied Natural Gas (LNG).
Cheniere Energy received approval from the U.S. Department of Energy earlier this year to export natural gas, and is currently in the process of gaining approval from the Federal Energy Regulatory Commission (FERC) to clear the way for building out natural gas liquefaction capability.
“Beyond the direct investment and job creation that will come with the expansion, an LNG export facility here in Louisiana means new markets and new consumers for domestically produced natural gas – and that will in turn bring new exploration opportunities and jobs in the energy industry, in drilling and support industries, from North Louisiana to South Louisiana, both onshore and offshore,” Angelle said.
North Louisiana has dominated natural gas exploration since the initial rush to develop the Haynesville Shale natural gas formation in 2008, and drilling operations in the Haynesville Shale remain the most concentrated and active in the state. That activity is the primary reason Louisiana natural gas production surpassed 2 trillion cubic feet (tcf) in 2010 for the first time since 1984, and the U.S. Energy Department earlier in 2011 recognized the Haynesville as the top-producing U.S. natural gas play.
“The Haynesville Shale alone has been estimated to hold natural gas equivalent to a decade of U.S. consumption, and it will be producing that energy for years to come – but, even in a time when supply has driven natural gas prices down and investors have turned increasingly to shale plays for both natural gas and oil – energy companies are finding new natural gas opportunities across Louisiana and off its coast,” Angelle said.
Even as drilling and production continues in North Louisiana, South Louisiana exploration has recovered strongly from the sharp downturn in investment and activity that began in 2008. The most recent South Louisiana count showed 51 rigs actively drilling, nearly doubling the count from early July 2010.
“We have seen that exploration companies and investors have found drilling to greater depths worth the investment risk in areas once thought to be mostly played out – from exploration of the oil potential of the Austin Chalk and Tuscaloosa Marine Shale plays in the central region of the state to drilling onshore in our coastal parishes and in the shallow waters just off our shores,” Angelle said. “With that investment comes opportunities for jobs, development of new and existing businesses and increased revenue for state and local governments as they work to fund services such as education and transportation.”
Angelle noted that McMoran Exploration’s two deep wells in St. Mary Parish have come online as strong natural gas producers, and the company is continuing deep-well exploration, as are companies such as ConocoPhillips, drilling a 20,000-plus-foot well near Golden Meadow in Lafourche Parish, and Armstrong Drilling, which has drilled past 20,000 feet on a projected 26,000-foot well near Johnson’s Bayou in Cameron Parish.
Across South Louisiana since April 2009, a total of seven wells targeting depths below 19,000 feet have been completed – and all seven are currently producing. Another nine have been permitted, including seven targeting depths greater than 20,000 feet.
McMoran Exploration has announced also announced several shallow-water wells in Louisiana’s- federal waters within 10 miles of the coast drilled to depths of 25,000 feet to 30,000 feet or more that its analysts believe may contain several trillion cubic feet of natural gas.
“All this activity is happening in a time of strong supply in a limited market for natural gas, primarily serving our domestic needs,” Angelle said. “With the strong growing global demand for natural gas in developing nations and in the wake of growing concerns about the safety of nuclear energy in Asia, Cheniere’s development of LNG export capacity will create opportunities to accelerate activity in Louisiana’s exploration industry and strengthen its contribution to our state’s economy.”
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