Pangea LNG (North America) Holdings, LLC - Office of Fossil Energy

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II.REQUESTED AUTHORIZATIONPangea requests long-term, multi-contract authorization to export up to 398.5 Bcf/y ofnatural gas in the form of LNG, which is the equivalent of approximately eight (8) MTPA, byvessel from the ST LNG Project to any nation with which the United States currently has, or inthe future enters into, an FTA requiring the national treatment for trade in natural gas and LNG,for a 25-year term. Pangea requests that such authorization commence on the date of first export,with such first export to occur no later than seven (7) years following issuance of theauthorization requested herein. Pangea is requesting this authorization in order to act on its ownbehalf and as agent for third parties. 10Pangea will file the long-term export contracts that are the subject of the authorizationrequested herein following execution of such agreements, which has yet to occur. The gassupply underlying these long-term contracts will come from various sources in the United Statesthrough the ST LNG Project’s connection to the interstate and intrastate pipeline grid. Thissupply can be sourced in large volumes in the spot market or pursuant to long-termarrangements, for the account of Pangea or third-party customers. Through the planned STPipeline interconnections, natural gas can be obtained from vast reserves spread over a largeportion of North America. Compression will be used as necessary to ensure that adequate gasflows can be achieved from the interconnected pipelines into the ST Pipeline and to the ST LNGProject at the delivery pressure required by the liquefaction process.10Pangea will comply with all DOE/FE requirements for exporters and agents, including the registrationrequirements as first established in Freeport LNG Development, L.P., DOE/FE Order No. 2913 and most recentlyset forth in CE FLNG, LLC, DOE/FE Order No. 3193. See Freeport LNG Development, L.P., DOE/FE Order No.2913 (Feb. 10, 2011), Errata Notice Correcting Footnote 9 in Order 2913 Issued 2/10/2009 (Feb. 17, 2011). Seealso CE FLNG, LLC, DOE/FE Order No. 3193 (Nov. 21, 2012).- 5 -
In addition to the Eagle Ford and conventional South Texas production, which are inclose proximity to the ST LNG Project, the planned ST Pipeline interconnects offer indirectaccess to the Marcellus, Haynesville, Woodford basins and other conventional Gulf Coast andNorth American production through displacement. In 2011, total annual domestic natural gasproduction was 23 trillion cubic feet and on the rise. 11In view of these production levels, thedemonstrated ability of the domestic gas industry to increase production, 12 and the vast size ofthe total gas reserves available in the United States 13 and Canada, all of which dwarf the ST LNGProject’s natural gas needs, there is a great deal of certainty with respect to the adequacy ofsupply for the ST LNG Project. These conditions are expected to persist for the foreseeablefuture. For example, according to the U.S. Energy Information Administration’s projections:“U.S. natural gas production grows by 1.0 percent per year, to 27.9 trillion cubic feet in 2035,more than enough to meet domestic needs for consumption, which allows for exports.” 14Giventhe large supply and increased production of domestic natural gas, the proposed exports are notanticipated to have any meaningful impact on the availability of natural gas in the United Statesas a whole, or, in particular, the Gulf Coast region.Pursuant to the Energy Policy Act of 1992, applications for authorization to exportnatural gas and LNG to nations with which the United States has an FTA requiring the nationaltreatment for trade in natural gas and LNG are deemed to be in the public interest and must be11U.S. Energy Information Administration, Annual Energy Outlook 2012 Early Release (Jan. 2012), available athttp://www.eia.gov/forecasts.aeo/er/excel/overview.fig02.data.xls.12See, generally, U.S. Energy Information Administration, Annual Energy Outlook 2012, at p. 3 (June 2012),available at http://www.eia.gov/forecasts/aeo/.13The U.S. Energy Information Administration’s Annual Energy Outlook 2012 employs as its reference caseestimated proved and unproved shale gas resources of 542 trillion cubic feet, out of a total U.S. resource of 2,203trillion cubic feet. Id. at p. 93.14Id. at p. 92.- 6 -
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Pangea LNG (North America) Holdings, LLC - Office of Fossil Energy

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