CenterPoint upgrades grid to serve Freeport LNG

Electricity transmission and distribution company CenterPoint Energy will spend $80mn to upgrade the coastal Texas transmission grid to supply 656MW of electricity to the Freeport LNG export project on Quintana Island about 70 miles (113km) southwest of Houston.

CenterPoint Energy will build a new 345kV Jones Creek substation and upgrade and reconfigure the 138kV network in the Freeport area by mid-2017 to meet sizable new load from the LNG export facility expected to start service in 2018.

The 656MW increase in power demand from the facility is the equivalent of the projected load growth for all of New England in the next three years. The projected load equals the consumption of 328,000 new Texas homes during mild weather.

While other proposed LNG export projects plan to use pipeline gas to fuel on-site operations, a majority of the power needed to supply Freeport LNG will come from the power grid to comply with Houston-area emission restrictions.

GE Oil & Gas is supplying electric-drive compressors and six, 75MW motors, along with other electric equipment for two of the project's liquefaction trains.

The board of the Electric Reliability Council of Texas (ERCOT) endorsed the plan earlier this month without discussion.

Freeport LNG started construction for two initial liquefaction and loading facilities in late November. Freeport said the first of three export trains from the $14bn facility will be on line in September 2018, with more trains following five and 10 months later.

The export terminal also will require 146MW to serve a gas pre-treatment facility off Quintana Island. About 82MW of that will be self-supplied.

Round-the-clock Houston power assessments average $36/MWh for Calendar 2018, a 10pc increase from 2016. Spark spreads at the Houston hub in the same period increase by 4pc.

More infrastructure and generation may be needed along the Gulf coast to serve industrial demand from LNG facilities and chemical manufacturers seeking to take advantage of soaring US natural gas production from shale formations.

CenterPoint officials said new load created by Freeport LNG underscores a need for investment in a new 345kV line, called the Houston Import Project, to move additional power from north Texas to the Houston area.

NRG Energy and Calpine, two of the state's largest power producers with generation in Houston, oppose the $590mn transmission line project, which has also been supported by ERCOT.

The US Department of Energy has authorized Freeport LNG to export up to 13.2mn t/yr of LNG, equivalent to 1.8 Bcf/d (51mn m³/d) of gas, to all international markets.

Freeport expects to export more gas to customers in countries that have free trade agreements with the US, including South Korean utility SK E&S. The 2.2mn t/yr of capacity owned by SK E&S could be exported under a license valid only for export to countries that have preferential trade terms with the US in natural gas trade, for total exports of 15.4mn t/yr.

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