How Michael Smith Built A $14 Billion Natural Gas Plant In Texas | Forbes

66 194
2.4%
Forbes1.07M
Published on 15 Jun 2021, 14:30
Quintana Island is a 7-mile speck of land off Freeport, Texas, tucked in where the Brazos River empties into the Gulf of Mexico. Over the past 200 years, the island has been home to a Mexican fort, then a busy seaport for early Texas farmers, who shipped out cotton. Union ships later bombarded Confederate troops stationed there. In 1900 came the Great Galveston Hurricane, which killed 11,000 in the immediate vicinity and wiped Quintana clean. By the time Michael S. Smith set foot on the island in 2002, it was languishing: a few dozen dilapidated homes, a migratory bird sanctuary and beach, and a brownfield of storage tanks built on fill dredged from navigation channels. “We’d be sinking in the mud if we were standing here then,” Smith says.

Smith has made his own historic mark on the island. Having spent $14 billion, he now owns a controlling interest in Freeport LNG, which chills and exports 2 billion cubic feet of natural gas per day, most of it so-called shale gas, horizontally drilled, hydraulically fracked. At current market prices that daily output is worth some $14 million, on which Freeport collects about $5 million a day in tolling revenue. “We are taking clean American natural gas, adding tremendous value and exporting it to countries that do not have enough energy and would otherwise be burning dirty coal,” he says.

Since becoming operational in September 2019, Freeport LNG has loaded 200 cargoes destined for Japan, South Korea and Croatia, where a single shipment can meet the annual energy needs of tens of thousands. Freeport will export about 15 million tons of LNG this year—the energy equivalent of 130 million barrels of oil—and is on track to book nearly $2.5 billion in revenue. Smith’s 63% ownership in the limited partnership is worth in excess of $1 billion.

Read the full profile on Forbes: forbes.com/sites/christopherhe...


Subscribe to FORBES: youtube.com/user/Forbes?sub_co...

Stay Connected
Forbes newsletters: newsletters.editorial.forbes.c...
Forbes on Facebook: fb.com/forbes
Forbes Video on Twitter: twitter.com/forbes
Forbes Video on Instagram: instagram.com/forbes
More From Forbes: forbes.com

Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
newsautotechmusickids