(Adds background, comment from Senator Murkowski)
WASHINGTON, July 31 (Reuters) - The U.S. Energy Department on Thursday approved Oregon LNG to export liquefied natural gas, as the Obama administration works through applications to export fuel from the domestic drilling boom to markets in Asia and Europe.
Oregon LNG, which is controlled by Leucadia National Corp , has been authorized by the department to export up to 1.25 billion cubic feet per day of the fuel for 20 years. It hopes to begin exporting LNG in 2017.
The Astoria, Oregon-based project still needs approval from the Federal Energy Regulatory Commission (FERC), which will review the project's environmental impacts.
The DOE's review of the Oregon project was initiated before the Obama administration shook up its LNG review process in May. Under the revamp, the DOE will no longer issue conditional approvals of LNG projects.
Instead, the DOE would decide whether a project is in the national interest only after the FERC issues a final environmental review. The change is expected to benefit companies that have strong financial backing for their projects.
The DOE has given the green light to three LNG projects this year, and Oregon LNG could be one of last to get initial approval from the department under the old system.
In March, as the Obama administration was under pressure to approve projects amid Russia's aggression toward Ukraine, the DOE approved Veresen Inc's Jordan Cove plant. Weeks earlier it approved Sempra's Cameron project.
On Wednesday, the FERC approved construction of the Freeport LNG Development LP's LNG project in Texas, the third project that now has full U.S. approval to send the fuel to countries with which Washington does not have a free trade agreement.
The first of those, Cheniere's Sabine Pass plant in Louisiana, is expected to begin shipping LNG next year.
Senator Lisa Murkowski, from energy producing state Alaska and the top Republican on Energy Committee, welcomed both recent approvals. She said she would keep a "close eye" on the new review system to "make sure the progress we've seen doesn't slip."
(Reporting by Timothy Gardner; Editing by Chris Reese and Diane Craft)