Golden Pass LNG

Construction of the $1 billion Golden Pass liquefied natural gas terminal near Sabine Pass is among myriad indicators of the region's rebirth as a petrochemical superpower, Southeast Texas leaders said Tuesday.

"We're almost getting into a second Spindletop," declared Kathleen Jackson, a Golden Pass LNG spokeswoman, referring to the oil boom that kicked off the last century for Southeast Texas.

Golden Pass LNG on Tuesday announced it had awarded a $1 billion contract to Chicago Bridge and Iron Co. to build a LNG terminal near Sabine Pass.

Cheniere Energy already has begun construction of its Sabine Pass LNG terminal across the ship channel from Sabine Pass in Cameron Parish, La.

The Golden Pass project will take about three years to complete, opening in 2009, and be able to process 2 billion cubic feet of natural gas a day, said Tom Burger, Golden Pass LNG vice president.

The announcement is good news for the Texas and Louisiana coasts, Jefferson County Commissioner Mark Domingue said.

"To keep the refineries competitive, we need that LNG," he said. "It will make the future economic climate of Southeast Texas much better for the next 20 years."

The terminal will sit on 900 acres on the Sabine-Neches Ship Channel, across from Pleasure Island.

It will include two ship unloading berths, five storage tanks, vaporization facilities and gas send-out and ship unloading systems, according to a Golden Pass news release.

Materials from dredging will be used for nearby wetlands restoration, plant officials said.

Some of the LNG processed at the facility will stay in Southeast Texas as a fuel for other industries, Jackson said.

The plant is expected to permanently employ up to 75 people, Burger said. Construction is expected to create some 1,000 temporary jobs in the region, said Bruce Steimle, spokesman for CB&I.

"The majority of those folks will be recruited from the Southeast Texas area," he said, adding that many subcontracts also will go to local businesses.

Port Arthur Mayor Oscar Ortiz said the influx of new jobs will bring a lot of extra cash flow into the area, boosting the retail market.

"There is going to be a lot of money around," he said.

For all the excitement the Golden Pass LNG terminal has stirred, Ortiz is cautious about Port Arthur growing too much, too soon.

The region also has other major petrochemical projects in the pipeline, including Sempra Energy's Port Arthur LNG, a pipeline in Sabine Pass as well as Cheniere's project.

All the projects combined are expected to import 5,000 to 7,000 construction workers during the next few years, Ortiz said. This means more pressure on the housing market, basic infrastructure and water and sewer lines, he said.

"In the short term, it is going to cost the city money," he said.

"In the long term, I am hoping these people we are making these accommodations for will stay here and build homes or buy homes and shop locally and increase the tax base so we can get some of our investment back."

Domingue said all the problems created by the plant's creation are "good problems."

He said the plant will keep the Texas and Louisiana coasts competitive in the petrochemical industry.

Golden Pass LNG, the terminal's owner, is expected to be 70 percent owned by an affiliate of Qatar Petroleum, with ExxonMobil and ConocoPhillips affiliates owning the remaining shares.

LNG is natural gas that has been super-cooled to minus 260 degrees Fahrenheit, transforming it into an odorless, non-toxic liquid, according to the Center for Liquefied Natural Gas, a Washington-based industry group.

In liquid form, LNG occupies about 600 times less space than natural gas, allowing it to be more easily transported. After storage and transportation, LNG is converted back into natural gas and used in homes and industry.

Burger said three key elements played into Sabine Pass landing the LNG site. They were deep-water access, the pipeline infrastructure and the Southeast Texas market for natural gas.

"Energy is the economic engine of this area," he said. "This project will help keep this area a key energy gateway."