Oxy Wins LNG Permit Extension

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Occidental Petroleum Corp. said Wednesday it won government approval for a three-year extension of its permit to begin construction on a liquefied natural-gas terminal in Texas.


Occidental’s subsidiaries in the area, Ingleside Energy LLC and San Patricio Pipeline LLC, asked the U.S. Federal Energy Regulatory Commission Jan. 17 to extend the original July 2008 startup deadline to April 30, 2011.


The letter cited market conditions in the LNG industry for the delay in launching construction at the site outside Ingleside, Texas. The LNG trade has been hampered by lack of development and decreasing demand. Also, overseas facilities have not been providing enough liquefied gas.


In October, Occidental said it was seeking more sources for gas supplies before building the terminal. The facility would be able to deliver as much as 1 billion cubic feet of natural gas per day.


Shares in oil companies have been hit this week. Oil futures ended lower yesterday as investors and traders seemed unconvinced that the Fed’s surprise rate cut would hold off a recession. An economic downturn would dampen demand for crude.


Shares in Occidental slipped 6.3 percent to $61.05 in afternoon trading Wednesday on the New York Stock Exchange.