About five years ago, a homegrown Louisiana liquefied natural gas export terminal operator projected it would be poised in 2020 to ship super-cooled natural gas to international customers eager to buy cleaner fuel sources. The project now has a new twist.
Instead of being online this year, the company is now raising money from institutional investors and approaching global banks about chipping in $200 million in capital it would use for pre-engineering and design work for a revamped LNG export terminal.
That’s because Baton Rouge-based G2 LNG, which has since changed its moniker to G2 Net Zero LNG, has a new plan. The company seeks to recapture or offset carbon emissions from its $11 billion planned LNG export terminal — all the way back to the well head in the natural gas fields.
That concept has attracted interest from customers in nations looking for not just cleaner fuel sources but those that have reduced carbon emissions through existing renewable sources such as wind and solar power.
G2 Net Zero LNG expects to begin selling industrial gases, such as argon and nitrogen, as early as 2026 that is produced in a facility that recaptures carbon emissions. The export terminal is expected to produce 13 million tons of LNG each year. The company has a 766-acre site in Cameron Parish near the Gulf of Mexico and has another 500 acres next door for expansion.
G2 Net Zero LNG looks to use technology developed by Siemens Energy and NET Power that would enable the plant to capture 4 million tons of CO2 during the liquefaction process.
NET Power created a system that burns natural gas to generate electricity using pure oxygen. Then the CO2 is recycled in a semiclosed loop system. NET Power already has a pilot plant in Texas, which produces 50 megawatts of electricity, with plans to build a 300-megawatt plant with the same technology by 2022.
G2 Net-Zero also is exploring technology capable of reducing leaks of methane from natural gas pipelines and wells onshore.
“We think that we can eliminate about 85% of the emissions upstream,” said Chas Roemer, chairman of G2 Net-Zero LNG. “There’s always going to be some emissions upstream, but we can reduce that substantially. We want to be net zero not almost net zero,” he said.
Carbon offsets, or carbon credits, is how the company expects to achieve its net zero carbon emissions concept.
Demand for a cleaner version of LNG is high among countries that have plans to reach net zero carbon emissions by 2050. Carbon is a greenhouse gas that contributes to climate change by entering the atmosphere and causing the Earth’s protective ozone layer to deteriorate.
“I field calls every day about the availability of my product; I know what the market is. If I can provide clean LNG and other clean byproducts, I will sell every drop and molecule that I have,” Roemer said.
While there might be significant interest, the company doesn’t have any contracts or financing lined up yet.
The Federal Energy Regulatory Commission, which permits potential LNG facilities, terminated the prefiling process for then-G2 LNG in 2017. That means the company still needs to go through the FERC process, which typically takes years.
“We have a lot of institutional (investor) interest …. We will seek the best partner and terms that we can,” Roemer said, “but there’s a big difference between a call and a contract.”
In recent months, the company promoted its chief financial officer, Angele Davis, to the chief executive officer role. She is tasked with leading development efforts.
Davis is a former commissioner of administration for Louisiana, leading the agency under former Gov. Bobby Jindal and serving as deputy commissioner under former Gov. Mike Foster Jr. She joined G2 firm in 2019.
Roemer is a former president of the state Board of Elementary and Secondary Education and son of former Gov. Buddy Roemer.
The key, Roemer said, is to begin selling industrial gases along the Gulf Coast as a way to make money, beginning construction on that facility well before the federal regulatory process for its LNG facility is completed. It takes about five years to build liquefaction units, and that’s a long time to wait before a project to generate cash.
“We needed to generate revenues sooner rather than later,” Roemer said.
The company looks to break ground in about 18 months on the first phase of the industrial gases facility, which doesn’t require FERC approval.
The LNG export terminal is expected to have 10 liquefaction units, with capacity to produce 1.3 million tons each — somewhat smaller than a traditional LNG facility. The company looks to buy about 600 billion cubic feet of natural gas each year.
After pitching the traditional LNG facility concept to potential investors and customers for years, the company decided to pull back and look for a more competitive angle.
“There are countries around the world before they enter a contract give you a carbon score,” he said. “It doesn’t matter if the U.S. isn’t part of the Paris Climate Agreement, the rest of the world is.”