May 30, 2019
Approved Applications for LNG Export Projects in the United States: Louisiana
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 this 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 our next 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.
Louisiana:
The Calcasieu Pass Project (FERC docket CP15-550)
The Calcasieu Pass Project envisions the construction of an LNG production and export facility to be located on the Calcasieu Ship Channel in Cameron Parish, LA, consisting of nine 1.2-million-ton liquefaction blocks and two 200,000 cubic meter full containment LNG storage tanks. In addition, the project also includes the construction of a maritime terminal to facilitate the loading of LNG vessels as well as a lateral pipeline interconnecting with major interstate and intrastate natural gas pipelines.
Venture Global Calcasieu Pass, LLC initiated the pre-filing review process with FERC on October 7, 2014, which FERC approved just three days later. In February 2015, Venture Global Calcasieu Pass, LLC, a subsidiary of Venture Global LNG, filed a long-term, multi-contract authorization to export up to 132.8 billion cubic feet of natural gas per year to Free Trade (FTA) and Non-Free-Trade Agreement (NFTA) countries. The DOE allowed this export of LNG to FTA countries in June 2015.
In September 2015, Venture Global Calcasieu Pass, LLC, and TransCameron Pipeline, LLC, filed a joint application with FERC under Section 3 of the Natural Gas Act (NGA) to site, construct, and operate the proposed LNG facility. FERC ultimately authorized the construction of the proposed Calcasieu Pass Project on February 21, 2019. A few days later, on March 5, 2019, the DOE approved export of LNG from this facility to NFTA countries.
Venture Global Calcasieu Pass, LLC began construction during March 2019, and the project is expected to produce LNG for export in 2022.
The Sabine Pass Liquefaction Expansion Project – Trains 5 & 6 (FERC docket CP13-552)
The Sabine Pass Liquefaction Project seeks the expansion of the existing Sabine Pass LNG terminal located in Cameron Parish, LA through the construction of six natural gas liquefaction trains.
Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Partners, obtained authorization to construct and operate Trains 1 through 4 of the Liquefaction Project in April 2012, and construction of the facility was fully completed in October 2017. As for the additional Trains 5 and 6, FERC granted approval for their construction and operation in April 2015. Construction was completed on Train 5 in March 2019, and the company has stated that “[a]ll regulatory approvals have been received to construct and operate Train 6, and [Final Investment Decision] is expected to be reached upon obtaining commercial contracts and financing sufficient to support construction.”
According to a media report, Cheniere Energy L.P. agreed an Engineering, Procurement, and Construction (EPC) contract with Bechtel for Sabine Pass Train 6 in November 2018. In addition, Bloomberg L.P. reported that Cheniere Partners entered into a 20-year LNG sale and purchase agreement (SPA) in December 2018 with Petronas LNG Ltd for the purchase of 1.1 million tons per annum of LNG from Sabine Pass Liquefaction as soon as Train 6 starts commercial production.
The Driftwood LNG Project (FERC docket 17-117)
The Driftwood LNG Project is operated by Driftwood LNG, LLC, a subsidiary of Tellurian Inc., and proposes the construction of a new LNG production and export terminal to be located on the west bank of the Calcasieu River, south of Lake Charles, LA. According to Driftwood LNG, LLC, “the terminal will be able to export up to [27] million, [600,000] tonnes of LNG per year to customers worldwide.”
In March 2017, Driftwood LNG, LLC, filed a permit application with FERC for the construction and operation of the Project, and FERC granted its approval on April 18, 2019.
DOE received an application in September 2016 from Driftwood LNG, LLC, to export up to 1,496.5 billion cubic feet of natural gas per year to FTA and NFTA countries. In February 2017, DOE granted such export authorization to FTA countries and very recently, on May 2, 2019, did the same for NFTA countries.
Construction of the LNG Project has already begun and, based on the company’s current projections, commercial operations should start in 2023.
The Cameron LNG Expansion Project (FERC docket CP15-560)
The Cameron LNG Expansion Project involves the construction of two additional liquefaction trains and two additional LNG storage tanks to the existing Cameron LNG terminal in Hackberry, LA. The Cameron LNG Export Project includes three liquefaction trains and Cameron LNG, LLC, has already received all necessary regulatory approvals for their construction and operation.
Sempra LNG, jointly with Cameron LNG, LLC, filed an application with FERC in September 2015 under NGA Section 3 to site, construct, and operate the additional LNG facilities, which application was approved in May 2016. DOE then granted long-term, multi-contract authorization to export up to 515 billion cubic feet per year of natural gas to NFTA countries in July 2016. DOE had previously approved such export to FTA countries in July 2015.
On May 14, 2019, Cameron LNG, LLC, announced in a Press Release that it had begun commercialisation from the first liquefaction train of the Cameron LNG Export terminal. According to the company, “Cameron LNG completed all major construction activities for Train 1 of the liquefaction-export project and began the commissioning and start-up process in November 2018. Last month, the facility began receiving gas flow for testing as it reached the final stage of the commissioning process.”
The Magnolia LNG Export Project (FERC docket CP14-347)
The Magnolia LNG Export Project consists of the construction and operation of a new LNG export terminal to be located in Lake Charles, LA, and operated by Magnolia LNG, LCC, a wholly owned subsidiary of Liquefied Natural Gas Ltd. This project will create four liquefaction trains, each with a capacity of 2 million tonnes per annum of natural gas.
The Magnolia LNG Export Project received approval from FERC on April 15, 2016, as well as authorization from DOE to export LNG up to a total volume of 224.5 Bcf per year of natural gas to FTA countries on March 21, 2019. DOE has not yet taken any decision regarding export to NFTA countries.
Despite being approved by both FERC and DOE, construction has yet to start. The company has declared in a Media Release dated July 23, 2015 that Magnolia LNG entered into a legally binding agreement with Meridian LNG Holdings Corp for up to 2 Mtpa of liquefied natural gas. The agreement provides that “Magnolia will provide liquefaction services to Meridian LNG over the term of the contract in return for monthly capacity payments. Meridian LNG is responsible for procurement and delivery of feed gas to the liquefaction plant and for arranging all LNG shipping required to transport the LNG from the liquefaction plant to its customers.”
The Lake Charles LNG Liquefaction Project (FERC CP14-120)
The Lake Charles LNG Liquefaction Project is a joint venture between Energy Transfer L.P. and Shell U.S. LNG, LLC, and involves the construction of new LNG storage capacity and re-gasification facilities at the existing Lake Charles LNG import terminal located in Lake Charles, LA.
In March 2014, Lake Charles LNG Export Company, LLC, and Lake Charles LNG Company, LLC, sought authorization with FERC to site, construct, and operate the Liquefaction Project. FERC granted approval on December 17, 2015. In June 2017, Lake Charles LNG Export Company, LLC, also obtained authorization from DOE to export up to 121 Bcf per year of natural gas from the Lake Charles terminal to FTA and NFTA countries.
In March 2019, according to a media report, Energy Transfer and Shell entered into a Project Framework Agreement (PFA) “to further develop a large-scale LNG export facility in Lake Charles, Louisiana toward a potential investment decision (FID).” In addition, the companies stated that they “have started actively engaging with LNG Engineering, Procurement and Contracting (EPC) companies with a plan to issue an Invitation to Tender (ITT) in the weeks ahead. Another media report stated the bidding process has opened for a construction contract earlier this month.
References:
The Calcasieu Pass Project
Website – Venture Global LNG Calcasieu Pass
The Sabine Pass Liquefaction Expansion Project – Trains 5 & 6
Website – Cheniere Sabine Pass Liquefaction Facilities: Trains 1-6
Cheniere News Release: FERC Approves the Sabine Pass Liquefaction Project (Apr. 16, 2012)
LNG World News, Cheniere inks Sabine Pass Train 6 EPC deal with Bechtel (November 13, 2018)
The Driftwood LNG Project
The Cameron LNG Expansion Project
FERC Order Granting Authorizations Under Section 3 of the Natural Gas Act (Issued May 5, 2016)
The Magnolia LNG Export Project
Media Release – Magnolia LNG Signs Binding Agreement with Meridian LNG
The Lake Charles LNG Liquefaction Project
Website – Proposed Project Lake Charles LNG Export Facility
Rigzone, Shell and Energy Transfer to Seek Bids for Louisiana Project (Mar. 26, 2019)
Houston Chronicle, Energy Transfer, Shell open construction bids for Lake Charles LNG (May 3, 2019)
The Center for Agricultural and Shale Law is a partner of the National Agricultural Law Center (NALC) at the University of Arkansas System Division of Agriculture, which serves as the nation’s leading source of agricultural and food law research and information. This material is provided as part of that partnership and is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.
