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What is the proposed Freeport LNG liquefaction project?

Why was the Quintana Island location chosen for the liquefaction project?

What regulatory approvals will be needed for the liquefaction project, and what is the timeline on which you expect them to occur?

Will an air permit modification be required for the new liquefaction facilities?

How long will it take to construct the proposed liquefaction facilities at the Freeport LNG Quintana Island terminal?

Is the United States in a position to export LNG?

What is the expected economic value generated by the liquefaction project?

Will the liquefaction project create any new jobs?

Will LNG vessel traffic increase at the Freeport LNG facility as a result of the liquefaction project?

Will the Freeport LNG facility still be able to import LNG?

Must any new natural gas pipelines be built to supply the proposed project?

Does Freeport LNG require any additional land in order to develop its proposed project?

Will all of the proposed facilities be located on Quintana Island?

Will Freeport LNGís underground storage facilities at Stratton Ridge be utilized as part of the liquefaction project?

What will be the impact on the local tax base?

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What is the proposed Freeport LNG liquefaction project?

The Freeport LNG facility on Quintana Island near Freeport, Texas, is an existing LNG receiving, storage and regasification terminal. Freeport LNG now proposes to expand the terminal to create an import/export terminal, providing nominal natural gas pretreatment, liquefaction and export capacity of approximately 13.2 million tons per annum of LNG. The project will be designed to liquefy approximately 2.0 billion cubic feet per day of natural gas delivered to the terminal through intrastate pipelines interconnected with Freeport LNG’s pipeline and meter station at Stratton Ridge, Texas. Natural gas will be treated for removal of carbon dioxide, sulfur compounds, water and mercury; liquefied; and stored in full containment tanks. LNG will be exported from the terminal by LNG carriers via the Freeport Harbor Channel.

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Why was the Quintana Island location chosen for the liquefaction project?

Texas is the nationís leading natural gas producer, accounting for more than 30% of total US natural gas production. As natural gas supplies continue to increase in the U.S. with the development of massive shale gas deposits, the state is ideally suited to meet the growing international demand for LNG. Freeport LNG already operates a facility on Quintana Island that serves as an LNG receiving, storage, and regasification terminal, so expanding this terminal to liquefy and export LNG is a logical step. The Eagle Ford shale gas deposits in South and Central Texas and the Barnett and Haynesville shale gas deposits in North and East Texas are expected to be significant sources of supply to the project.

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What regulatory approvals will be needed for the liquefaction project, and what is the timeline on which you expect them to occur?

Freeport LNG needs approval from the Federal Energy Regulatory Commission (FERC) and the U.S. Department of Energy (DOE), among other regulatory agencies, to proceed with the project. FERC is responsible for the environmental and safety review of the proposed facilities. Freeport LNG has extensive and constructive experience working with FERC. Freeport LNG expects to receive FERC's authorization to construct and operate the liquefaction facility in the third quarter of 2014.

Another critical government permit that is required for the project is an export license from the DOE. The DOE is required to grant an export license, unless it determines that it is not in the public interest. In addition to considering the impact of the liquefaction project on the local and national gas markets, the DOE examines other policy considerations such as global environmental and foreign policy impacts. Freeport LNG submitted two applications to the DOE, each for 511 Bcf/year, in December 2010 and 2011, respectively, and now holds authorizations to export 1,022 Bcf/year of LNG to Free Trade Agreement (FTA) countries and 657 Bcf/year of LNG to non-FTA countries.

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Will an air permit modification be required for the new liquefaction facilities?

Freeport LNG has submitted an application to the Texas Commission on Environmental Quality to modify the current air permit for its terminal.

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How long will it take to construct the proposed liquefaction facilities at the Quintana Island terminal?

Freeport LNG anticipates an approximately 45-month construction period to complete commissioning and achieve full commercial operations of the initial train of the liquefaction project. Each subsequent liquefaction train is anticipated to commence full commercial operation at approximately six-month intervals thereafter.

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Is the United States in a position to export LNG?

With abundant supplies of natural gas, the U.S. is well positioned to export LNG to growing energy markets around the world, including Latin America, Europe and Asia. Estimates of US gas reserves have been raised significantly in recent years by the Department of Energy, the Potential Gas Committee and many industry analysts, largely as a result of technological innovations that have enabled the widespread exploitation of shale gas in Texas and across the country.

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What is the expected economic value generated by the liquefaction project?

The total economic stimulus of the Freeport LNG liquefaction project is estimated to be between $5.1 billion and $7.4 billion per year. Much of the benefits would accrue within Texas and the Gulf Coast region, where major shale gas deposits, such as the Barnett, Haynesville and Eagle Ford, are located.

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Will the liquefaction project create any new jobs?

More than 3,500 workers will be employed during the four- to five-year construction period if the liquefaction facilities are fully built out as proposed, and over 160 new full-time employees will be hired to manage, operate and maintain the new facilities. In addition, it is estimated that between 24,000 and 30,000 new jobs will be created to produce, process and transport the 2.0 billion cubic feet per day of natural gas that the project will require, primarily in Texas and the Gulf Coast region.

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Will LNG vessel traffic increase at the Freeport LNG facility as a result of the project?

A limited number of LNG vessels have called at Freeport LNG since the facility opened in mid-2008 and the installed regasification facilities have operated only on a limited basis. The proposed liquefaction facilities are expected to operate at a much higher utilization rate, so the number of vessel calls is expected to increase significantly but would still be less than currently authorized.

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Will the Freeport LNG facility still be able to import LNG?

Yes, the equipment currently installed for the import and regasification of LNG will remain in place and be capable of operation on short notice.

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Must any new natural gas pipelines be built to supply the proposed project?

Many new pipelines are being installed across the Gulf Coast region to deliver new shale gas supplies to market, but no new pipelines are expected to be specifically required to supply the Freeport LNG liquefaction facilities.

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Does Freeport LNG require any additional land in order to develop its proposed project?

Freeport LNG is a tenant of Port Freeport and has worked with the Port to add onto its existing leases to install the proposed liquefaction facilities.

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Will all of the proposed facilities be located on Quintana Island?

Freeport LNG will build a gas pretreatment and compression facility approximately three miles away towards Stratton Ridge.

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Will Freeport LNGís underground storage facilities at Stratton Ridge be utilized as part of the liquefaction project?

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The Quintana Island LNG terminal is the only one in the industry with associated underground natural gas storage, which will be used to balance the flow of natural gas into the new liquefaction facilities and thereby achieve highly ratable and reliable LNG production for the terminalís liquefaction customers. 

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What will be the impact on the local tax base?

Freeport LNG currently pays nearly $8 million per year in taxes to the State of Texas and various jurisdictions in Brazoria County, which will increase substantially in the coming years as tax abatements on the existing facilities expire. In addition, Freeport LNG currently pays more than $1 million per year to the Town of Quintana, which is adjacent to its terminal. All of these amounts are expected to increase after the proposed facilities are placed in operation.

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