Written by Chloe Marie – Research Specialist
In May of 2017, we wrote three articles addressing the
then-pending
and approved
applications for LNG Export Projects in the United States. Since that time,
many legal developments have occurred and so we will once again provide a
discussion of LNG export developments through a planned five-part series. The
first two articles in the series will address approved applications for LNG
export projects in the United States with this article providing an overview on
the development of six projects in Louisiana that have been approved by both
the Federal Energy Regulatory Commission (FERC) and the U.S. Department of
Energy (DOE) and our next article focusing on approved projects located in
Texas and Georgia. Our next two planned articles will address the status of
pending LNG Export Project applications, and our final article in the series
will provide an overview of LNG export projects that have moved beyond the mere
application stage and are currently in operation.
Louisiana:
The Calcasieu
Pass Project (FERC docket CP15-550)
The Calcasieu Pass
Project envisions the construction of an LNG production and export
facility to be located on the Calcasieu Ship Channel in Cameron Parish, LA,
consisting of nine 1.2-million-ton liquefaction blocks and two 200,000 cubic
meter full containment LNG storage tanks. In addition, the project also
includes the construction of a maritime terminal to facilitate the loading of
LNG vessels as well as a lateral pipeline interconnecting with major interstate
and intrastate natural gas pipelines.
Venture Global Calcasieu Pass, LLC initiated the
pre-filing review process with FERC on October 7, 2014, which FERC approved
just three days later. In February 2015, Venture Global Calcasieu Pass, LLC, a
subsidiary of Venture Global LNG, filed
a long-term, multi-contract authorization to export up to 132.8 billion cubic
feet of natural gas per year to Free Trade (FTA) and Non-Free-Trade Agreement
(NFTA) countries. The DOE allowed
this export of LNG to FTA countries in June 2015.
In September 2015, Venture Global Calcasieu Pass, LLC,
and TransCameron Pipeline, LLC, filed a joint application with FERC under
Section 3 of the Natural Gas Act (NGA) to site, construct, and operate the
proposed LNG facility. FERC ultimately authorized the construction of the
proposed Calcasieu Pass Project on February 21, 2019. A few days later, on
March 5, 2019, the DOE approved
export of LNG from this facility to NFTA countries.
Venture Global Calcasieu Pass, LLC began construction during
March 2019, and the project is expected to produce LNG for export in 2022.
The Sabine Pass
Liquefaction Expansion Project – Trains 5 & 6 (FERC docket CP13-552)
The Sabine Pass
Liquefaction Project seeks the expansion of the existing Sabine Pass
LNG terminal located in Cameron Parish, LA through the construction of six
natural gas liquefaction trains.
Sabine Pass Liquefaction, LLC, a subsidiary of
Cheniere Partners, obtained
authorization to construct and operate Trains 1 through 4 of the Liquefaction
Project in April 2012, and construction of the facility was fully completed in
October 2017. As for the additional Trains 5 and 6, FERC granted approval for
their construction and operation in April 2015. Construction was completed on
Train 5 in March 2019, and the company has stated that “[a]ll regulatory approvals have
been received to construct and operate Train 6, and [Final Investment Decision]
is expected to be reached upon obtaining commercial contracts and financing
sufficient to support construction.”
According to a media
report, Cheniere Energy L.P. agreed an Engineering, Procurement, and
Construction (EPC) contract with Bechtel for Sabine Pass Train 6 in November
2018. In addition, Bloomberg L.P. reported
that Cheniere Partners entered into a 20-year LNG sale and purchase agreement
(SPA) in December 2018 with Petronas LNG Ltd for the purchase of 1.1 million
tons per annum of LNG from Sabine Pass Liquefaction as soon as Train 6 starts
commercial production.
The Driftwood
LNG Project (FERC docket 17-117)
The Driftwood LNG Project is operated by
Driftwood LNG, LLC, a subsidiary of Tellurian Inc., and proposes the
construction of a new LNG production and export terminal to be located on the
west bank of the Calcasieu River, south of Lake Charles, LA. According to
Driftwood LNG, LLC, “the terminal will be able to export up to [27] million, [600,000]
tonnes of LNG per year to customers worldwide.”
In
March 2017, Driftwood LNG, LLC, filed a permit application with FERC for the
construction and operation of the Project, and FERC granted its approval on April 18, 2019.
DOE
received an application in September 2016 from Driftwood LNG, LLC, to export up
to 1,496.5 billion cubic feet of natural gas per year to FTA and NFTA
countries. In February 2017, DOE granted such export authorization to FTA countries and very
recently, on May 2, 2019, did the
same for NFTA countries.
Construction
of the LNG Project has already begun and, based on the company’s current
projections, commercial operations should start in 2023.
The Cameron LNG
Expansion Project (FERC docket CP15-560)
The Cameron LNG Expansion
Project involves the construction of two additional liquefaction
trains and two additional LNG storage tanks to the existing Cameron LNG
terminal in Hackberry, LA. The Cameron LNG Export Project includes three
liquefaction trains and Cameron LNG, LLC, has already received all necessary
regulatory approvals for their construction and operation.
Sempra LNG, jointly with Cameron LNG, LLC, filed an
application with FERC in September 2015 under NGA Section 3 to site, construct,
and operate the additional LNG facilities, which application was approved
in May 2016. DOE then granted
long-term, multi-contract authorization to export up to 515 billion cubic feet
per year of natural gas to NFTA countries in July 2016. DOE had previously approved
such export to FTA countries in July 2015.
On May 14, 2019, Cameron LNG, LLC, announced in a Press
Release that it had begun commercialization from the first
liquefaction train of the Cameron LNG Export terminal. According to the
company, “Cameron LNG completed all major construction activities for Train 1
of the liquefaction-export project and began the commissioning and start-up
process in November 2018. Last month, the facility began receiving gas flow for
testing as it reached the final stage of the commissioning process.”
The Magnolia LNG
Export Project (FERC docket CP14-347)
The Magnolia
LNG Export Project consists of the construction and operation of a
new LNG export terminal to be located in Lake Charles, LA, and operated by
Magnolia LNG, LCC, a wholly owned subsidiary of Liquefied Natural Gas Ltd. This
project will create four liquefaction trains, each with a capacity of 2 million
tonnes per annum of natural gas.
The Magnolia LNG Export Project received approval from
FERC on April 15, 2016, as well as authorization
from DOE to export LNG up to a total volume of 224.5 Bcf per year of natural
gas to FTA countries on March 21, 2019. DOE has not yet taken any decision
regarding export to NFTA countries.
Despite being approved by both FERC and DOE,
construction has yet to start. The company has declared
that “Magnolia LNG signed a binding agreement with Meridian LNG Holding Corp
for firm capacity rights for up to 2 mtpa on 22 July 2015, and further extended
this agreement on December 6, 2016” before adding that “Magnolia LNG continues
negotiations with a number of other LNG buyers for the purchase of LNG on
20-year terms.”
The Lake Charles
LNG Liquefaction Project (FERC CP14-120)
The Lake Charles LNG
Liquefaction Project is a joint venture between Energy Transfer L.P.
and Shell U.S. LNG, LLC, and involves the construction of new LNG storage
capacity and re-gasification facilities at the existing Lake Charles LNG import
terminal located in Lake Charles, LA.
In March 2014, Lake Charles LNG Export Company, LLC,
and Lake Charles LNG Company, LLC, sought authorization with FERC to site,
construct, and operate the Liquefaction Project. FERC granted
approval on December 17, 2015. In June 2017, Lake Charles LNG Export Company,
LLC, also obtained
authorization from DOE to export up to 121 Bcf per year of natural gas from the
Lake Charles terminal to FTA and NFTA countries.
In March 2019, Energy Transfer and Shell entered into
a Project Framework Agreement (PFA) “to further develop a large-scale LNG
export facility in Lake Charles, Louisiana toward a potential investment
decision (FID).” In addition, the companies stated
that they “have started actively engaging with LNG Engineering, Procurement and
Contracting (EPC) companies with a plan to issue an Invitation to Tender (ITT)
in the weeks ahead. According to a media
report, the bidding process has opened for a construction contract
earlier this month.
References:
The Calcasieu
Pass Project
The Sabine Pass
Liquefaction Expansion Project – Trains 5 & 6
The Driftwood
LNG Project
The Cameron LNG
Expansion Project
DOE/FE
Order No. 3846, Opinion and Order Granting Long-Term, Multi-Contract
Authorization to Export Liquefied Natural Gas by Vessel from Trains 4 and 5 of
the Cameron LNG Terminal in Cameron and Calcasieu Parishes, Louisiana, to
Non-Free Trade Agreement Nations,
July 15, 2016
The Magnolia LNG
Export Project
The Lake Charles
LNG Liquefaction Project
Additional
Resources:
This
material is based upon work supported by the National Agricultural
Library, Agricultural Research Service, U.S. Department of Agriculture.
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