Penn State Shale Law Blog: Shale Law in the Spotlight – Pending Applications for LNG Export Projects in the United States: Alaska, Florida, and Louisiana

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).

This article will address the status of pending LNG export project applications in the states of Alaska, Florida, and Louisiana. Our next article will address the status of similar applications in the states of Mississippi, Oregon, and Texas. The 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.

Alaska:

The Alaska LNG Project (FERC docket CP17-178)

The Alaska LNG Project is proposed by Alaska Gasline Development Corporation (AGDC) and would create a new liquefaction facility in Nikiski, Alaska, comprised of three LNG trains, two LNG storage tanks, terminal facilities and marines services, and two loading berths. The Alaska LNG Project will have the capacity of producing up to 20 million metric tonnes per annum (Mtpa) of LNG.

In July 2014, AGDC sought authorization from the U.S. Department of Energy (DOE) to export up to 20 million metric tonnes per annum (Mtpa) of LNG to Free Trade Agreement (FTA) and Non-Free Trade Agreement (NFTA) countries. On November 21, 2014, DOE issued an Order allowing Alaska LNG to export up to 929 Bcf of LNG per year to FTA countries. DOE granted similar authorization for LNG export to NFTA countries on May 28, 2015.

On April 17, 2017, AGDC filed an application with FERC for the construction and operation of the Alaska LNG Project. FERC is still reviewing said application, and AGDC expects FERC staff to issue a final Environmental Impact Statement by March 2020. AGDC also expects a decision to be rendered by June 2020.

On March 8, 2019, Alaska LNG announced that it had entered into an agreement with BP and ExxonMobil “to collaborate on ways to advance the Alaska LNG project by working together to identify ways to improve the project’s competitiveness, and progress the Federal Energy Regulatory Commission authorization to construct the project.”

Florida:

The Strom LNG Project (FERC docket is unknown)

The Strom LNG Project consists of the construction and operation of a portable liquefaction facility, including “small-to-medium size modular, scalable, portable liquefaction systems (MLNG units)” to be located in Crystal River, Florida.

In April 2014, Strom, Inc. (Strom) filed an application before DOE seeking authorization to export approximately 28.21 billion standard cubic feet (Bscf) per year of liquefied natural gas to FTA countries. DOE granted approval to export LNG to FTA countries via ISO containers transported by ocean-going carriers in October 2014. In August 2015, DOE received notice of receipt of Strom’s application to export up to 56.42 Bcf per year of LNG to NFTA countries; the application is currently under review.

In March 2014, Strom filed a Petition for Declaratory Order requesting an exemption from the jurisdiction of FERC over the construction and operation of the Project. Strom, Inc. argued that “since this is a portable system and not an LNG terminal as defined by the NGA and not a facility as defined by law, that no FERC permit is required.” The company indicated its belief that this matter should be addressed by the state of Florida and local jurisdictions. In August 2014, FERC denied such petitions for lack of a filing fee (see FERC docket CP14-121).

As of today, the status of the Strom LNG Project is still considered to be active although there has been no recent docket activity.

The Jacksonville Project (FERC docket CP17-41)

The Jacksonville Project, owned by Eagle LNG Partners Jacksonville, LLC, proposes the construction and operation of a new LNG terminal on the north bank of the St. Johns Rivers in Jacksonville, Florida, with a generating capacity of approximately 1 million metric tonnes per annum (Mtpa) of LNG.

In January 2016, Eagle LNG filed an application before DOE to export up to 49.8 Bcf per year of LNG to FTA and NFTA countries. In an Order dated July 21, 2016, DOE approved such export to FTA countries; however, DOE is still reviewing the application to export to NFTA countries.

On April 18, 2019, FERC issued a final Environmental Impact Statement (EIS) for the Jacksonville Project and concluded that “approval of the Jacksonville Project would result in some limited adverse environmental impacts; however, these impacts would be reduced to less-than-significant levels with the implementation of Eagle LNG’s proposed mitigation and the additional measures recommended in the EIS.”

Eagle LNG anticipated that construction would begin by the second quarter of 2019.

Louisiana:

The Plaquemines LNG Project (FERC docket CP17-66)

The Plaquemines LNG Project proposes the construction and operation of a new LNG export terminal and associated facilities along the west bank of the Mississippi River in Plaquemines Parish, Louisiana. According to Venture Global Plaquemines LNG, owner of the project, Plaquemines LNG export terminal is foreseen to have a capacity to export approximately 20 million metric tonnes per year and will be built in two phases, the first of which will consist of 10 million metric tonnes per year and whose construction will begin upon receipt of all necessary permits. The second phase will include an additional 10 million metric tonnes per year but will begin based on market demand.

Venture Global Plaquemines LNG submitted a pre-filing request for the environmental review of the Plaquemines LNG Project before FERC in June 2015, which FERC approved approximately a month later. In March 2016, Venture Global Plaquemines LNG filed an application to export up to 1,240 Bcf of natural gas per year to FTA and NFTA countries and DOE authorized such export in July 2016 but only to FTA countries. The company’s application to export to NFTA countries is still awaiting review by DOE.

On February 28, 2017, Venture Global Plaquemines LNG sought authorization from FERC to site, construct, and operate the proposed natural gas liquefaction and export terminal. On May 3, 2019, FERC issued a final Environmental Impact Statement for the project and determined that such project would likely result in adverse environmental impacts; however, such impacts would be reduced to less than significant levels as long as Venture Global Plaquemines LNG implements avoidance, minimization, and mitigation measures recommended by FERC staff. The company subsequently declared that the “project remains on track for a Final Investment Decision and commencement of construction in late 2019 with full commercial operations expected in 2023.”

The Commonwealth LNG Project (FERC docket is unknown)

The Commonwealth LNG Project consists of an LNG liquefaction and export facility with a capacity of 8.4 million tonnes per annum (Mtpa) to be located on the west bank of the Calcasieu Ship Channel, Louisiana. Commonwealth LNG initiated its pre-filing application to FERC in 2017 and submitted a draft Resource Report 13 to FERC on December 21, 2018. The company anticipates that it will reach a final investment decision as well as receive a favorable decision from FERC by the first quarter of 2021. Operations are planned to begin by early 2024.

The Monkey Island LNG Project (FERC docket is unknown)

The Monkey Island LNG Project is a proposed LNG export terminal owned by SCT&E LNG, LLC, and includes the construction and operation of six LNG trains, each with a planned production capacity of 2 million tonnes per annum (Mtpa), LNG storage tanks and vessel loading facilities located on Monkey Island, Cameron Parish, Louisiana. SCT&E LNG, LLC sought and obtained approval from DOE to export approximately 1.60 Bcf of natural gas per day to FTA countries in December 2014. The company is still awaiting a response from DOE regarding its application, filed in July 2014, for LNG export to NFTA countries.

According to the project website, SCT&E LNG, LLC, is ready to begin the pre-filing process before FERC. In July 2017, Monkey Island LNG, formerly known as SCT&E LNG, LLC, announced that it hired AECOM, an environmental services group, to carry out the Phase 1 environmental study for the Monkey Island site as part of its FERC application.

The Sabine Pass LNG Third Berth Expansion Project (FERC docket CP19-11)

The Third Berth Project involves the expansion of the existing Sabine Pass LNG terminal, located in Cameron Parish, Louisiana, on the Sabine Pass Channel and would create a third marine berth in order to accommodate further LNG vessels with a capacity of 125,000 to 180,000 cubic meters. In late February 2018, Sabine Pass LNG, L.P., submitted its NEPA pre-filing request before FERC, which accepted it on March 8, 2018. On September 7, 2018, Sabine Pass LNG, L.P., filed an application requesting authorization pursuant to NGA Section 3 to construct and operate the Third Berth Project.

According to the project schedules, FERC is expected to issue an Environmental Assessment in October 2019 and to render its decision regarding the NGA Section 3 application by January 2020.

References:

The Alaska LNG Project

Website – Alaska LNG

AGDC News Release, “Export Application Filed with U.S. Department of Energy for Alaska LNG Project” (July 21, 2014)

DOE/FE Order No. 3643, Order Conditionally Granting Long-Term, Multi-Contract Authorization to Export Liquefied Natural Gas by Vessel from the Proposed Alaska LNG Terminal in Nikiski, Alaska, to Non-Free Trade Agreement Nations (May 28, 2015)

Re: Alaska Gasline Development Corporation, Docket No. CP17-_-000, Application for NGA Section 3 Authorization for AKLNG Project (April 17, 2017)

AGDC News Release, “AGDC Signs Alaska LNG Collaboration Agreement with BP & ExxonMobil” (March 8, 2019)

The Strom LNG Project

Re: Strom, Inc. FE Docket No. 14-56-LNG, Application for Long-Term Authorization to Export Liquefied Natural Gas to Free Trade Agreement Countries (FTA) (April 15, 2014)

DOE/FE Order No. 3537, Order Granting Long-Term, Multi-Contract Authorization to Export Liquefied Natural Gas in ISO Containers Loaded at the Proposed Strom LNG Terminal in Crystal River, Florida, and Exported by Vessel to Free Trade Agreement Nations (Oc tober 21, 2014)

Strom, Inc.; Application for Long-Term, Multi-Contract Authorization to Export Liquefied Natural Gas to Non-Free Trade Agreement Nations for a 25-Year Period, 80 FR 51793 (August 26, 2015)

Strom, Inc.; Notice of Petition for Declaratory Order, 79 FR 18906 (April 4, 2014)