(EnergyAsia, May 15 2013, Wednesday) — A US company jointly owned by Exxon Mobil Corp and Qatar Petroleum International has announced it will proceed to build a US$10 billion in a liquefied natural gas (LNG) export plant in Sabine Pass in Texas state.

Golden Pass Products LLC said its shareholders have signed a commercial agreement for the proposed 15.6-million-metric ton/year liquefaction plant at its world-class Golden Pass terminal that will largely target Asia and other fast-growing energy markets paying at least five times the US domestic natural gas price.

Golden Pass Products’ export strategy will be shaped by US regulations that allow hydrocarbons to be sold only to countries that have free trade agreements (FTA) with Washington DC. As non-FTA countries account for the bulk of global LNG demand, the company said it will aim to export LNG around the world through the Sandy Hook terminal in the UK.

From the Sandy Hook terminal, jointly owned by Qatar Petroleum LNG Services (QG II) Ltd (67.5%), ExxonMobil Qatargas (II) Terminal Company Ltd (24.15%) and Elf Petroleum UK Limited (8.35%), Golden Pass Products would be able to re-export cargoes to other countries.

“This arrangement establishes a commercial framework to sell up to the full 15.6 million metric ton annual (MTA) output of the Golden Pass Products liquefaction project, and provide shipping and sales opportunities to existing and new markets, including leveraging the sponsors’ long- term arrangements for international imports via the UK’s South Hook facility,” it said.

The ability to use an external terminal to by-pass the US ban on direct oil and gas exports to non-FTA countries puts ExxonMobil and Qatar Petroleum at a major advantage over other companies planning to build at least a dozen LNG-export projects in the US.

To date, the US Energy Department has approved only Cheniere Energy Inc’s Sabine Pass plant, due to start up by end-2015, to export to both FTA and non-FTA countries.

“This agreement sets out a highly competitive commercial blueprint for Golden Pass Products, with a commitment that builds on the unique combined strengths of QPI and ExxonMobil throughout the global downstream LNG value chain,” said Bill Collins, president of Golden Pass Products.

Having obtained US Department of Energy (DOE) authorisation to export to FTA countries, the company said it has applied for approval to sell to non-FTA countries.