OREANDA-NEWS. The US Federal Energy Regulatory Commission (FERC) has issued preliminary environmental approval for the Golden Pass LNG export project near Port Arthur, Texas.

The agency will accept public comments until 16 May on its draft environmental impact statement. It plans to issue a final environmental impact statement on 29 July. A positive environmental review is necessary before FERC would issue construction approval.

The $10bn project would be built at the site of the existing Golden Pass LNG import terminal. The export project is a venture of ExxonMobil (70pc) and state-owned Qatar Petroleum (30pc).

ExxonMobil said in February it plans to complete the regulatory process for the project this year.

Golden Pass would have three liquefaction trains with combined capacity of 15.6mn t/yr, or 2 Bcf/d (57mn m?/d) of gas. The US Department of Energy has authorized exports of up 15.6mn t/yr to countries that have free trade agreements (FTAs) with the US and will consider an application to export the same volume to non-FTA nations if FERC issues environmental clearance.

The project includes construction of 2.6 miles (4.2km) of 24 inch (61cm) diameter pipeline, three new compressor stations and interconnections for bidirectional flow to provide feed gas.

It is unclear when ExxonMobil and Qatar Petroleum would make a final investment decision (FID), as low oil prices have hurt the economics of US LNG exports. The economics of US exports are based on a wide differential between domestic gas prices and global oil prices.

With a wave of liquefaction capacity in Australia and the US coming on line in the next few years, ExxonMobil expects the global LNG market to be oversupplied by around 2020-2023, putting pressure on spot prices during that time frame, ExxonMobil said in February.

ExxonMobil expects LNG demand to roughly triple by 2040, however, and it will only make FIDs on LNG projects for which it secures long-term contracts.