Written by Chloe Marie –
Research Specialist
In May 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 addressed 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 and the second one focusing on five
projects in Texas and one project in Georgia that have been approved by both
the Federal Energy Regulatory Commission (FERC) and the U.S. Department of
Energy (DOE).
The third article in our series
addressed the status of pending LNG export project applications in the states
of Alaska, Florida, and Louisiana. A fourth article addressed the
status of similar applications in the states of Mississippi, Oregon, and Texas.
This final article in our
series will provide an overview of LNG export projects that have moved beyond
the mere application stage and are currently in operation.
Existing
projects:
Alaska:
The Kenai LNG Export Facility,
located in Nikiski, on the Kenai Peninsula, Alaska, began operation in 1969 and
was the sole LNG export plant of U.S. production for more than four decades.
The Kenai LNG Export Facility consists of a natural gas liquefaction plant as
well docking and loading facilities for the exportation of North Cook Inlet
natural gas.
ConocoPhillips’ export license
for the Kenai LNG plant terminated in March 2013 and all export activities shut
down until DOE granted a new authorization in April 2014 to export up 40 Bcf of
natural gas over a two-year period from 2014 to 2016. In February 2016, the
U.S. Department of Energy once again authorized export of LNG for
approximately 40 Bcf per year from February 19, 2016 to February 18, 2018.
ConocoPhillips put the company
up for sale in November 2016 due to a change in market conditions, and Andeavor,
formerly Tesoro, acquired the Kenai LNG export facility from ConocoPhillips in
February 2018. Andeavor planned to expand and support operations at its nearby
Kenai refinery. A short time later, Marathon Petroleum Corporation reported in a Press Release
dated October 2018 that it had purchased and gained control of Andeavor,
becoming a “leading US refining, midstream and marketing company.”
On March 29, 2019,
Trans-Foreland Company, LLC, a subsidiary of Marathon Petroleum Corporation, filed an application
under Section 3 of the Natural Gas Act (NGA) before the U.S. Federal Energy
Regulatory Commission (FERC) to modify the existing Kenai LNG Plant, including “bring[ing]
parts of
Kenai LNG Plant out of its current warm idle status and add[ing] a 1,000
horsepower electric-driven boil-off gas compressor unit.” Most recently, FERC announced on May 17, 2019,
that it will start preparing an environmental assessment (EA) to address the
environmental impacts of the proposed Kenai LNG Cool Down Project.
Louisiana:
The Sabine Pass LNG import,
storage, and vaporization terminal is located along the Sabine Pass River in
Cameron Parish, Louisiana. The facility became an export facility after FERC approved in April 2012 the
construction and operation of four trains at the existing terminal to liquefy
domestic natural gas for overseas exports – known as the Sabine Liquefaction
Project. Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy
Partners and owner of the export project, indicated that “this enhanced
facility will be operated as a bidirectional terminal and will have the
capability both to liquefy natural gas for export, and to import and regasify
LNG, simultaneously.”
Sabine Pass Liquefaction, LLC,
sought to export approximately 803 Bcf of natural gas per year from Trains 1
through 4 at the existing Sabine Pass LNG terminal to Free Trade Agreement
(FTA) countries in August 2010 and obtained authorization from
the U.S. Department of Energy (DOE) a month later. Sabine Pass filed a separate
application to export LNG to Non-Free Trade (NFTA) countries in September 2010
and received final approval in
August 2012.
Construction of Trains 1
through 4 began on August 9, 2012, and Train 1 reached substantial completion
on May 27, 2016. Sabine Pass LNG Terminal became the first export facility
built in the continental United States to ship liquefied natural gas overseas,
with a first-ever shipment made to Bahia LNG terminal in Brazil from Train 1 in
February 2016. Trains 2 through 4 reached substantial completion on September
16, 2016, March 31, 2017, and October 9, 2017, respectively.
Texas:
In August 2012, Corpus Christi
Liquefaction, LLC, a subsidiary of Cheniere Energy Inc. filed an application
under Section 3 of the Natural Gas Act with FERC proposing to construct and
operate LNG export and import facilities on the northern shore of Corpus
Christi Bay, Texas, including three liquefaction trains, two trains of ambient
air vaporizers and a marine terminal with two berths. On December 30, 2014, FERC
granted approval for the
Corpus Christi Liquefaction Project.
Corpus Christi Liquefaction,
LLC, received approval from the
U.S. Department of Energy (DOE) to export up to 767 Bcf per year of natural gas
to FTA countries in October 2012. DOE also approved export up to 8.61
Bcf per day of natural gas to NFTA countries in May 2015.
Construction on Trains 1 and 2
started on May 13, 2015, and production at the Corpus Christi LNG plant from
Train 1 started in November 2018. On March 4, 2019, Cheniere Energy Inc. announced in a Press Release
that Train 1 has reached substantial completion on February 28, 2019, and
declared that “[u]nder
sale and purchase agreements (“SPAs”) with Endesa S.A. and PT Pertamina
(Persero), the date of first commercial delivery is expected to occur in June
2019, upon which the term of each of these SPAs commences.” Additionally, FERC
approved in January 2019 Cheniere’s request to introduce gas for the
commissioning of Train 2 at the Corpus Christi LNG plant with the objective to begin
commercial production in a near future, according to a media
report.
Maryland:
The Cove Point Liquefaction
Project expands the existing Cove Point LNG import terminal located on the
Chesapeake Bay near Lusby, Calvert County, Maryland. This Liquefaction Project
involved a bi-directional import or export service and the construction of one
liquefaction train and associated facilities. Operations at the existing import
terminal first started in the fall of 2003.
Dominion Cove Point LNG, LP,
applied for an export license authorization with the U.S. Department of Energy
(DOE) for up to 1 Bcf per day of liquefied natural gas to FTA countries. DOE granted such authorization
in October 2011. In the same month, Dominion also sought authorization to
export LNG to NFTA countries, and DOE approved the company’s
request in May 2015 and authorized LNG export for up to 281 Bcf per year.
On April 1, 2013, Dominion
Cove Point LNG, LP, sought approval from FERC for the construction and
operation of the Cove Point Liquefaction Project, and FERC granted authorization on
September 29, 2014. Construction of the liquefaction facility started in
October 2014. On April 10, 2018, Dominion Energy announced in a Press Release
that commercial service for LNG export began at the Cove Point LNG terminal in
late March 2018 and declared that the company “will produce LNG for ST Cove
Point, which is the joint venture of Sumitomo Corporation and Tokyo Gas, and
for Gail Global (USA) LNG, the U.S. affiliate of GAIL (India) LTD, under
20-year take-or-pay contracts.
References:
The
Kenai LNG Export Facility in Alaska
The
Sabine Pass LNG Terminal in Louisiana
The
Corpus Christi Liquefaction Project in Texas
DOE/FE Order No.
3638, Final Opinion and Order Granting Long-Term, Multi-Contract Authorization
to Export Liquefied Natural Gas by Vessel from the Proposed Corpus Christi
Liquefaction Project to be located in
Corpus Christi, Texas, to Non-Free Trade Agreement Nations (May 12, 2015)
The
Cove Point Liquefaction Project in Maryland
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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