Shale Law in the Spotlight: Approved Applications for LNG Export Projects in the United States (Part 1 of 2)

Written by Chloe Marie – Research Fellow

Last week, our Shale Law in the Spotlight article addressed the status of pending applications for LNG export projects in the United States. This article will address approved applications for LNG export projects in the United States by providing an overview on the development of five projects approved by both the Federal Energy Regulatory Commission (FERC) and the U.S. Department of Energy (DOE) in the last few years including one project in Maryland and four projects in Louisiana. Our next Shale Law in the Spotlight will focus on additional approved LNG export projects in Texas, Georgia, and Oregon.

Maryland:

The Cove Point Liquefaction Project is an expansion project of the existing Dominion Energy Cove Point LNG Terminal located on the Chesapeake Bay in Lusby, Calvert County, Maryland.  This project involves the construction of liquefaction facilities, which will allow the export of liquefied natural gas internationally from the Marcellus and Utica shale formations out of the existing Cove Point LNG terminal. The Cove Point project will accommodate up to 750 million standard cubic feet per day of natural gas. Construction began in October 2014 and is nearly finished with an in-service date expected in late 2017.  

In September 2011, Dominion Energy filed an application with DOE to obtain long-term authorization to export liquefied natural gas to countries that are signatories to free-trade agreements (FTA) with the United States over a 25-year period. Dominion Energy plans to export approximately 1 billion cubic feet of natural gas per day from the Cove Point LNG terminal. DOE granted such authorization on October 7, 2011. On October 3, 2011, Dominion Energy filed another application with DOE to export liquefied natural gas to non-free trade agreement countries, which approval was granted in September 2013. In the meantime, in April 2013, Dominion Energy filed an application with FERC to obtain authorization to site, construct, and operate liquefaction facilities at the existing Cove Point LNG terminal. On September 29, 2014, FERC issued an order granting Dominion Energy approval to construct and operate the Cove Point Liquefaction Project. 

Louisiana:

The Sabine Liquefaction Project is an expansion project to the existing Sabine Pass LNG terminal operated by Cheniere Energy. Sabine Pass was the first export facility to ship natural gas overseas, with a shipment to Bahia LNG terminal in Brazil from Train 1 of the terminal facility in February 2016. Thus, Cheniere is the first and only exporter of shale gas at this time. The Sabine Pass site is located along the Sabine Pass River on the border between Texas and Louisiana, in Cameron Parish, Louisiana.

The Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Partners, initiated the pre-filing review process with FERC in July 2010 for the construction project of the LNG Terminal, including up to six liquefaction trains each capable of producing approximately 4.5 metric tonnes per annum (mtpa). This was approved in August 2010; and in January 2011, Sabine Pass Liquefaction and Sabine Pass LNG filed an application with FERC to obtain a Natural Gas Act (NGA) Section 3 permits for the construction and operation of the Sabine Pass LNG Terminal’s Train 1 to Train 4. FERC issued an order approving the siting, construction, and operation of the LNG terminal on April 16, 2012, and construction began in August 2012.

In the meantime, Sabine Pass Liquefaction and Sabine Pass LNG filed another application with FERC to obtain NGA Section 3 permits for the construction and operation of two additional liquefaction trains in September 2013, which was approved on April 6, 2015. On June 26, 2015, DOE authorized the export of liquefied natural gas to non-free trade agreement nations.

The Cameron Liquefaction Project is a joint venture project between Sempra Energy and Mitsui & Co. Ltd and proposes the construction of additional liquefaction and export facilities to the existing Cameron LNG Terminal in Hackberry, Cameron Parish, Louisiana.

In November 2011, Sempra Energy filed a long-term multi-contract authorization to export up to 1.7 Bcf per day of LNG to any FTA country, which was approved in January 2012. In December 2011, Sempra Energy filed another long-term multi-contract authorization to export a similar amount of LNG per day to non-FTA countries, which was approved by DOE in September 2014. In December 2012, Sempra Energy, jointly with Mitsui & Co., Ltd, filed a permit application with FERC to site, construct, and operate the proposed liquefaction facilities. FERC issued an order granting construction and operation of the facilities in June 2014. The construction of the liquefaction facilities started in October 2014, and the companies expect to begin commercial operations in late 2018.

The Lake Charles Liquefaction Project is a new LNG export project being developed at the Lake Charles LNG import terminal, including 9 Bcf of LNG storage capacity and re-gasification facilities, located in Lake Charles, Calcasieu Parish, Louisiana. In 2013, the Lake Charles LNG, a Delaware limited company, and the Lake Charles Exports, LLC, received authorization from DOE to export LNG from the existing terminal to FTA countries. On July 29, 2016, both companies obtained permission from DOE to export up to 2 Bcf per day of LNG to non-FTA countries. In March 2014, Lake Charles LNG filed a permit application with FERC and, on December 17, 2015, FERC issued an order granting approval for the siting, construction, and operation of the Lake Charles Liquefaction Project. Service is expected to begin in the year 2019.

Finally, the Magnolia LNG Export Project is a new export project operated by Magnolia LNG, LLC, and located on the Calcasieu Ship Channel, in the Lake Charles District, Louisiana. In February 2013, Magnolia LNG, LLC, received approval from DOE to export overseas up to 4 Mtpa of natural gas to FTA countries and again for an additional 4 Mtpa of natural gas in March 2014. In April 2014, Magnolia LNG, LLC, filed an application with FERC to obtain authorization to construct and operate the proposed new facilities, which was approved in April 2016. In November 2016, DOE granted Magnolia LNG, LCC, approval to export LNG to non-FTA countries.