NEW YORK: The US Department of Energy has advised American companies not to allow Chinese companies to invest in US liquefied natural gas export projects, the head of one such venture told Reuters.
The advice contributed to a lack of lucrative US gas export deals with Chinese companies, said Michael Smith, the chief executive of Freeport LNG. Some existing deals for liquefied natural gas, or LNG, are worth billions of dollars.
Smith said his privately owned company, which is building an LNG export project on the Texas coast to supply customers in Asia starting in 2018, was encouraged during the federal approval process to avoid inviting Chinese participation in case of a political backlash.
We were advised by the DOE to be careful who our customers were, because this is very political,” he said, calling the prospect of Chinese interest in a major US export project as “a political hot potato we couldn’t take the risk on.”
The issue of exporting US LNG has revealed a sharp divide between energy companies that want to sell the US commodity on world markets and consumes who say it would push up prices at home.
Each LNG project is subject to a tough approval process by the Energy Department, which weighs the impact that each project will have on the domestic gas market and on the environment.
