DOE Authorizes Second LNG Export Facility (Update)

Freeport LNG Expansion LP and FLNG Liquefaction LLC received conditional authorization on May 17 to export U.S. liquefied natural gas (LNG) from the Freeport LNG Terminal on Quintana Island, Texas, making it the second project to receive federal approval. Meanwhile, Canada is considering a proposed LNG export terminal in British Columbia.

The DOE announced that the LNG can be exported to countries that do not have a Free Trade Agreement (FTA) with the U.S. Freeport had previously received approval to export LNG from this facility to FTA countries on Feb. 10, 2011. Freeport was originally built as an LNG import facility.

Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export at a rate of up to 1.4 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years.

In February, Freeport entered into a binding 20-year liquefaction tolling agreement (LTA) with BP for 4.4 million tons per annum (mtpa). In July last year, Freeport executed LTAs with Osaka Gas Co., Ltd. and Chubu Electric Power Co. for a total of 4.4 mtpa.

The DOE granted the first authorization to export LNG to non-FTA countries in May 2011 for the Sabine Pass LNG Terminal in Cameron Parish, La., at a rate of up to 2.2 Bcf/d.

The DOE announcement noted that “Federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the United States, the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports ‘will not be consistent with the public interest.’”

In its review of the application, the DOE considered economic, energy security, and environmental impacts; public comments for and against the application; and “nearly 200,000 public comments related to the associated analysis of the cumulative impacts of increased LNG exports.” It determined that exports at the rates stipulated are not inconsistent with the public interest.

Several countries, most notably Japan, are interested in the development of U.S. LNG exports.

Canada is also planning for LNG export capacity. On May 6, the Canadian Environmental Assessment Agency (CEAA) announced it is taking public comments on whether a proposed project to export LNG from British Columbia merits a federal environmental review.

Prince Rupert LNG Ltd., a subsidiary of BG Group Plc., has proposed developing an LNG-export facility on Ridley Island at the Port of Prince Rupert. The project would be developed in two phases and will include three LNG trains with a total capacity of up to 21 million tonnes per year. Construction of the first two trains will begin in 2016, though market conditions could affect the timing of a second construction phase. The CEAA is accepting written comments until May 27 on whether a federal environmental assessment is needed.

Sources: POWERnews, DOE, Freeport, CEAA
This story was originally published May 17 and updated May 21.

—Gail Reitenbach, PhD, Managing Editor (@POWERmagazine, @GailReit) and Sonal Patel, Senior Writer (@sonalcpatel)