Costs and Financial Risks of Certain Liquefied Natural Gas Import Projects to U.S. Taxpayers and Gas Consumers

EMD-82-12: Published: Oct 19, 1981. Publicly Released: Oct 26, 1981.

Additional Materials:


Office of Public Affairs
(202) 512-4800

GAO was requested to review several questions regarding two projects developed to import liquefied natural gas (LNG) from Algeria. These projects are known as the El Paso and Trunkline Projects. Specifically, GAO reviewed information regarding any U.S. subsidies, Government loans, and tax credits available to the owners and operators of LNG facilities and what costs have been passed on to gas consumers since the flow of LNG in the El Paso Project was halted as a result of price disputes.

Both the Export-Import Bank and the Maritime Administration provided financial assistance for LNG projects. However, their involvement was not directly related to the U.S. importation of Algerian natural gas. The Export-Import Bank provided loans and loan guarantees to Sonatrach, the Algerian national oil and gas company, to facilitate Sonatrach's use of U.S. contractors and equipment in the construction of LNG facilities, thereby promoting American exports. The Maritime Administration, in line with its mandate to encourage the growth and maintenance of the U.S. merchant marine and shipbuilding industry, provided the U.S. shipbuilders and shipowners with construction subsidies and loan guarantees to ensure the construction of ships in the United States. U.S. owners of LNG facilities and ships are not entitled to any special energy tax credits. However, they qualify for the standard investment tax credit available to anyone who invests in certain depreciable property. Costs generally cannot be passed on to gas consumers until a project begins service. Because the Truckline Project has not yet begun operations, none of its costs have been passed on. The El Paso Project was in service when the last LNG shipments arrived from Algeria. Costs attributable to this project continue to be passed on.

Sep 25, 2017

Jun 30, 2017

Jun 29, 2017

Jun 15, 2017

May 31, 2017

May 4, 2017

Apr 26, 2017

Apr 25, 2017

Mar 29, 2017

Looking for more? Browse all our products here