Recent weeks have seen a string of new developments involving proposed US LNG export projects that together up to a significant acceleration of what was already a stampede. It is looking more and more likely that several projects will reach final investment decision (FID) before the end of 2015, with perhaps one or two reaching this important milestone before the end of 2014.
The developments include: another export approval for countries with which the US does not have a Free Trade Agreement (non-FTA countries), this time for Cameron LNG; a DoE approval to export LNG to FTA nations for Delfin LNG; a new application for an FTA export licence from Louisiana LNG; a formal application for environmental approval from the Federal Energy Regulatory Commission (FERC) for what now looks likely to be the first floating LNG (FLNG) project in the US, Excelerate’s Lavaca Bay project; and announcements by the FERC about the likely dates for environmental approvals for some of the projects that are already in the formal application process.
The FERC has also agreed to a request from Sabine Pass – the only project yet to have reached FID and entered the construction phase – to increase LNG production capacity from the project’s first four trains from 2.2 Bcf/d to 2.76 Bcf/d. The request was made to allow for extra capacity now expected following more detailed engineering of the trains.
Cameron LNG – FID before year end? The Department of Energy announced on 11th February that it had conditionally authorised Cameron LNG to export LNG to non-FTA countries at a rate of up to 1.7 Bcf/d (around 12 mtpa) for up to 20 years. It was the first such approval since November, when the DoE approved additional volumes from Freeport LNG. It takes the total volume of gas approved for export to non-FTA countries to 8.5 Bcf/d, equivalent to around 65 mtpa of LNG. Cameron LNG will consist of three 4 mtpa trains and is a conversion of an existing regasification terminal (pictured above).
The facilities will be wholly owned by Cameron LNG Holdings, a joint-venture with 50.2% indirectly owned by Sempra Energy and the remainder owned by GDF Suez, Japan LNG Investment (a joint venture formed by subsidiaries of Nippon Yusen Kabushiki Kaisha and Mitsubishi Corporation) and Mitsui & Co. – each owning 16.6%.
The announcement prompted GDF Suez to predict that FID would be taken in 2014, with construction commencing before the end of the year. The company added: “The completion of the environmental impact assessment by the FERC is expected in the coming weeks – as the last gate before FID.” If all goes to plan the project will start up in 2017 and reach full commercial operation by 2019.
A further fillip to the project came at the end of January when Japan’s Toho Gas signed a 20-year contract to lift 0.3 mtpa of Mitsui’s share of the output.
Jordan Cove – approval from Canada and next in line at DoE: Another project to have made significant progress in recent weeks is Jordan Cove LNG, one of the few projects proposed for the western coast of the United States. The project’s sponsors plan to source gas supply from both Canada and the US and this month received approval from the National Energy Board (NEB) to export Canadian gas as LNG for up to 25 years. The approved export points are existing gas pipelines that cross the Canada/US border near Kingsgate and Huntingdon, BC.
The DoE approval for Cameron referred to above puts Jordan Cove LNG at the front of the non-FTA export licence application queue – meaning that it has a good chance of getting approval to export US gas within weeks.
Excelerate files formal FERC application for Lavaca Bay: News that Excelerate has finally filed a formal application with the FERC for environmental approval for its Lavaca Bay project means the project is now on track to become the first FLNG project in the US. The company had hoped to make its formal application last May.
“The filing represents a major milestone and further strengthens project momentum as we head towards a final approval,” said the company’s CEO, Rob Bryngelson. “We continue to make strong progress on all fronts and hope to make a final investment decision within the next 12 months.” Excelerate now hopes to start up the project in the fourth quarter of 2018. It already has approval to export to FTA nations and is now fourth in the queue of DoE non-FTA export applications.
Sited along the coast south of Point Comfort, Texas, the project will consist of a permanently moored floating liquefaction, storage and offloading (FLSO) vessel with 4.4 mtpa of production capacity, 250,000 cubic metres of LNG storage and an onshore gas processing plant. The project is being designed and permitted to allow for expansion with the addition of a second FLSO.
Cheniere’s Corpus Christi moving towards FID: Yet another project that could reach FID within a year is Cheniere’s proposed green-field project at Corpus Christi in Texas. It is now third in the non-FTA export licence queue and is making good progress with its FERC application.
The FERC recently announced that it plans to release the final environmental impact statement for the proposed LNG import and export project on 8th October, 2014. It would be located near Corpus Christi, Texas, and would have the capacity to liquefy up to 2.1 Bcf/d. Other federal agencies have to act by 6th January, 2015 on any other authorisations for the project. So FID could come as early as the first few months of next year.
A question many are asking is: “is there an end in sight to non-FTA approvals from the DoE?” This is what the Department had to say in its statement announcing the Cameron approval:
“The Energy Department will continue to process the applications currently pending on a case-by-case basis, in the order of precedence previously detailed. During this time, the Department will continue to monitor any market developments and assess their impact in subsequent public interest determinations as further information becomes available.”
Make of that what you will.
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