Penn State Shale Law Blog: Shale Law in the Spotlight – Approved Applications for LNG Export Projects in the United States: Texas and Georgia

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 the first 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 this 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.

Texas:

The Stage 3 LNG Project (FERC CP18-512; CP18-513)

The Stage 3 LNG Project proposes to expand the existing Corpus Christi Liquefaction Project located on the La Quinta Channel of Corpus Christi Bay in San Patricio County, Texas, which is currently under construction. The Stage 3 LNG project would include the construction and operation of seven additional midscale liquefaction trains and one LNG storage tank. According to Corpus Christi Liquefaction Stage III, LLC, this project “would increase the expected aggregate nominal LNG production capacity at the Liquefaction Project to approximately 23 mtpa.”

Corpus Christi Liquefaction Stage III, LLC filed an application with FERC under section 3 of the Natural Gas Act (NGA) to site, construct, and operate the Stage 3 Project on June 28, 2018. FERC expects to issue a final decision in late June 2019, as stated in its Revised Schedule for Environmental Review of the Stage 3 Project dated February 2019. In March 2019, FERC issued an Environmental Assessment for the project and concluded that “approval of the Project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment.”

In addition, Corpus Christi Liquefaction Stage III, LLC sought authorization from DOE on June 29, 2018, to export approximately 11.45 million metric tonnes per annum from the proposed project to FTA and NFTA countries. This application is still under review by DOE.

The Freeport LNG Liquefaction Project (FERC docket CP12-509; CP15-518)

The Freeport LNG Liquefaction Project would expand the liquefaction capacity of the existing Quintana Island terminal near Freeport, Texas, by 15 million metric tons per annum and would add three liquefaction trains to the current infrastructure. Construction of the three liquefaction trains started in November 2014 and, according to Freeport LNG, the three trains are expected to start commercial operations between Q3 2019 and Q2 2020.

Freeport LNG received approval to export up to 511 Bcf of natural gas per year to FTA countries in February 2012. FERC granted authorization to proceed with the Liquefaction Project in July 2014, and DOE allowed export of LNG to NFTA countries for up to 5.74 Bcf per year in November 2014.

The Freeport LNG Train 4 Project (FERC docket CP17-470)

In June 2017, Freeport LNG filed an application under NGA section 3 with FERC to construct and operate an additional liquefaction train (Train 4) at the existing Quintana Island terminal. In March 2018, Freeport LNG requested authorization from DOE to export LNG to NFTA countries for up to 0.72 Bcf per day.

Most recently, on May 17, 2019, FERC issued an order authorizing construction of the proposed Freeport LNG Train 4 Project. FERC announced in a Press Release that this “project will allow [Freeport LNG] to liquefy for export the equivalent of an additional 0.74 billion cubic feet of natural gas per day from the site.”

Interestingly, FERC Commissioner Cheryl A. LaFleur wrote in a concurring statement published on May 16, 2019, that she believed “the Train 4 Project is not inconsistent with the public interest” while discussing concerns over FERC’s failure to analyze the significance of the Project’s GHG emissions on the human environment. She stated that FERC’s “general refusal to grapple with the significance of GHG emissions creates an additional risk here, as the Sierra Club challenges the Commission’s decision to issue an EA instead of an Environmental Impact Statement (EIS). Sierra Club contends that the project’s impacts are significant in the context of climate change and its contribution to GHG emissions.”

The Golden Pass LNG Export Terminal Project (FERC docket CP14-517)

The Golden Pass LNG Export Terminal Project would add liquefaction and export capabilities to the existing Golden Pass LNG import terminal near Sabine Pass, Texas, including three liquefaction trains each capable of producing up to 5.2 million metric tons per annum together with associated treatment, power and utility systems as well as interconnections to existing import facilities and controls.

In September 2012, Golden Pass Products, LLC, a subsidiary of Qatar Petroleum International, obtained authorization from DOE to export up to 740 Bcf per year of natural gas to FTA countries and, on December 21, 2016, were granted approval from FERC to construct and operate the export terminal project. In April 2017, Golden Pass Products, LLC, subsequently received permission to export LNG for up to 808 Bcf per year to NFTA countries.

On February 5, 2019, Golden Pass Products, LLC declared in a Press Release that it would begin construction as Qatar Petroleum secured a final investment decision with ExxonMobil. Golden Pass Products, LLC, also awarded the Engineering, Procurement and Construction (EPC) contracts for the project to a joint venture comprised of Chiyoda International Corporation, McDermott International Inc., and Zachry Group.

The Port Arthur Liquefaction Project (FERC docket CP17-20)

The Port Arthur Liquefaction Project proposes the construction and operation of two natural gas liquefaction trains capable of producing up to 13.5 million metric tons per annum, up to three LNG storage tanks and ancillary support facilities to liquefy and load LNG onto ships. The Liquefaction Project will be located along the Sabine-Neches ship channel in Texas.

In August 2015, Port Arthur LNG, LLC, a subsidiary of Sempra LNG & Midstream, received authorization from DOE to export up to 517 Bcf of natural gas per year to FTA countries. Most recently, FERC granted Port Arthur LNG, LLC, approval to site, construct, and operate the Liquefaction Project on April 18, 2019, following the issuance of the Final Environmental Impact Statement (FEIS) in January 2019. On May 2, 2019, DOE allowed LNG export to NFTA countries for up to 698 Bcf per year.

On May 21, 2019, Port Arthur LNG, LLC announced in a Media Release that Sempra LNG and Aramco Services Company, subsidiaries of Sempra Energy and Saudi Aramco, respectively, entered into a heads of agreement (HOA), which “anticipates the negotiation and finalization of a definitive 20-year liquefied natural gas (LNG) sale-and-purchase agreement (SPA) for 5 million tonnes per annum (Mtpa) of LNG offtake from Phase 1 of the Port Arthur LNG export project under development.”

Georgia:

The Elba Liquefaction Project (FERC docket no. CP14-103)

The Elba Liquefaction Project involves the expansion of the existing Elba Island LNG terminal located on Elba Island, Chatham County, Georgia. In March 2014, Elba Liquefaction Company, LLC, and Southern LNG Company, LLC, filed a joint application under NGA Section 3 with FERC to construct and operate the new LNG facilities. FERC granted approval of the Liquefaction Project on June 1, 2016.

DOE received applications in May and August 2012 from Southern LNG Company, LLC, to export up to 0.5 billion cubic feet of natural gas per day to FTA and NFTA countries, respectively. DOE granted authorization for such export to FTA countries in June 2012 and then to NFTA countries in December 2016. Construction of the Elba Liquefaction Project began in November 2016.

On March 1, 2018, Southern LNG Company, LLC filed an application with DOE to obtain a blanket authorization for the export of up to 255 Bcf of natural gas from the Elba Liquefaction Project on a short-term basis prior to full commercial operations. DOE allowed such export on July 6, 2018, to FTA and NFTA countries over a two-year period.

References:

The Stage 3 LNG Project

Website – Cheniere Liquefaction Facilities: Midscale Trains 1-7

Corpus Christi Liquefaction Stage III, LLC; Corpus Christi Liquefaction, LLC: and Cheniere Corpus Christi Pipeline, L.P.; Notice of Revised Schedule for Environmental Review of the Stage 3 Project, 84 FR 3773 (February 13, 2019)

FERC Stage 3 Project Environmental Assessment (March 2019)

In the Matter Of: Corpus Christi Liquefaction Stage III, LLC, Application for Long-Term Authorization to Export Liquefied Natural Gas to Free Trade Agreement Nations and Non-Free Trade Agreement Nations, U.S. DOE (June 29, 2018)

The Freeport LNG Liquefaction Project

DOE/FE Order No. 3066, Order Granting Long-Term, Multi-Contract Authorization to Export Liquefied Natural Gas by Vessel from the Freeport LNG Terminal to Free Trade Agreement Nations (February 10, 2012)

FERC Order Granting Authorizations Under Section 3 of the Natural Gas Act (Issued July 30, 2014)

DOE/FE Order No. 3357-B, Final Opinion and Order Granting Long-Term, Multi-Contract Authorization to Export Liquefied Natural Gas by Vessel from the Freeport LNG Terminal on Quintana Island, Texas, to Non-Free Trade Agreement Nations (November 14, 2014)

The Freeport LNG Train 4 Project

In the Matter Of: Freeport LNG Expansion, L.P. FLNG Liquefaction 4, LLC, Application for Long-Term Authorization to Export Liquefied Natural Gas to Non-Free Trade Agreement Nations (March 6, 2018)