Export Projects Update (April 2015)

BREAKING NEWS: DOE GRANT’S COVE POINT NON-FTA LNG AUTHORIZATION
The US Department of Energy today (May 07) issued a final authorization for Dominion Cove Point LNG to export domestically produced LNG to countries without a Free Trade Agreement with the United States. The Cove Point LNG Terminal in Calvert County, Maryland, is authorized to export LNG up to the equivalent of 0.77 billion standard cubic feet per day of natural gas for a period of 20 years. As reported below, all of the liquefaction capacity has already been sold.​ Link > DOE Order

LNG ALLIES MEMBER COMPANIES

Delfin LNG announced (Mar. 06) a memorandum of understanding (MOU) with BTG Pactual Commodities (BTG Pactual Group, São Paulo) for all of the liquefaction capacity of its first floating liquefaction (FLNG) vessel at the Delfin LNG Deepwater Port, to be located 50 miles offshore of Louisiana in the Gulf of Mexico. Delfin also signed an MOU with Lithuania’s LITGAS and a joint development agreement with Höegh LNG (both Feb. 27). Höegh LNG will act as a co-owner, owner’s engineer, and operator of the FLNG vessels. The Delfin project consists of four elements: (1) a new onshore gas compression station on a brownfield site; (2) an existing 42-inch pipeline to transport the gas offshore; (3) an offshore, deepwater port complex with four moorings; and (4) four FLNG vessels with an initial capacity of 8 mtpa that could be expanded to 13 mtpa. Delfin also said (Apr. 28) that Daniel Werner was hired as COO. Links > Delfin LNG Website > Delfin-BTG Release > Other Delfin News Releases

Texas LNG Brownsville. The Federal Energy Regulatory Commission (FERC) granted (Apr. 14) Texas LNG’s request to initiate pre-filing environmental review procedures for its LNG project to be located at the Port of Brownsville, Texas. (FERC Docket No. PF15-14). The company also held community meetings in Brownsville (May 5) and Port Isobel (May 6). The Texas LNG Brownsville project is to be built in two phases each of which will have a capacity of 2 mtpa. Samsung Engineering and Third Point LLC are both investors in the project. Texas LNG plans to use a shipyard-built, modular approach. Links > Texas LNG Website > FERC Pre-Filing Order

PROJECTS UNDER CONSTRUCTION

Cheniere Sabine Pass. FERC approved (Apr. 06) Cheniere Energy’s request to construct trains 5 and 6 of the company’s LNG export project in Louisiana. Trains 1-4 are already underway, with the first LNG expected by late 2015. The two additional trains approved by FERC bring the capacity of the Sabine Pass project to 27 mtpa. According to Cheniere, Stage 1 (Trains 1 & 2) is now 87% complete. Links > Cheniere Sabine Pass Website > FERC Order

Dominion Cove Point. DOE issued (May 07) its final license for Dominion’s Cove Point terminal in Lusby, Maryland, to export LNG to nations without free trade agreements with the United States. This action followed the FERC order (May 05) denying requests for rehearing and motions for stay of its order approving the project. In its March report to FERC, Dominion stated that engineering and procurement were each 78% complete and that construction was 2% complete. Cove Point is “fully subscribed” under 20-year agreements with Sumitomo Corp. (a Japanese trading company), Tokyo Gas Co. (the largest natural gas utility in Japan), and GAIL Global (USA) LNG, a subsidiary of GAIL, one of the largest natural gas processing and distributing companies in India. A LNG import project for more than four decades, Cove Point is expected to begin LNG exports in late 2017. Links > Cove Point Website > DOE Decision >  FERC Order

Freeport LNG successfully closed (Apr. 28) on debt financing commitments of approximately $4.56 billion in capital required for the construction of the third train at it’s export terminal on Quintana Island near Freeport, Texas. Freeport reached FID on the first two trains in Nov. 2014. Freeport has no LNG capacity left to sell from any of the three trains, having signed agreements with Osaka Gas and Chubu Electric Power (Japanese utilities), BP, and SK E&S (a South Korean utility). Train 1 is expected to come on line in Sept. 2018, with trains 2 and 3 following at five-month intervals. Links > Freeport LNG Website > Argus Media Story

PROJECTS IN FORMAL FERC REVIEW

Cheniere Corpus Christi. FERC issued an order (May 05) allowing Cheniere to commence all remaining site preparation work. Ramzi Mroue, VP of Cheniere International, told Reuters (Apr. 14) that Cheniere had arranged financing for Corpus Christi, sealed a $9.5 billion engineering, procurement and construction contract with engineering firm Bechtel, and would reach FID within 30 days. He also said: “We expect to sell another 2 [mtpa of LNG capacity] by the end of the year.” In total, the project’s three trains would have 13.5 mtpa capacity. Links > Cheniere Corpus Christi Website > Reuters Story

Lake Charles LNG. FERC released (Apr. 10) a Draft Environmental Impact Statement (EIS) for the Lake Charles project proposed by Trunkline Gas Company and affiliates at the existing LNG import terminal at Lake Charles, Louisiana. Comments on the draft EIS are due by June 1, 2015. The Lake Charles LNG export facility is to have a 14.3 mtpa capacity and it is “fully subscribed.” BG Group is the principal off-taker. Links > Lake Charles LNG Website > Draft EIS Order

Magnolia LNG (May 04) said that it has agreed upon final terms for its engineering, procurement, construction, and commissioning (EPCC) contract with the joint venture of SK E&C Group and Kellogg Brown & Root and that it has selected Clough‐CH∙IV to act as owners engineer for the EPC phase of the project.  Previously (Apr. 30), FERC set the date for the release of the Final EIS at Nov. 16, 2015. Magnolia also said (Apr. 23) that it had been notified by Meridian LNG that it intends to consummate the 20‐year liquefaction tolling agreement (LTA) with Magnolia, now that Meridian has executed a 20‐year gas sales agreement with E.On Global Commodities. Magnolia and Meridian LNG have substantially completed the negotiation of a LTA, agreeing upon key commercial terms and will now move forward to binding agreements for a total of 2 mtpa. Magnolia’s project will provide 8 mtpa of LNG from a site at the Port of Lake Charles, Louisiana. Magnolia is a wholly owned subsidiary of Australia’s Liquefied Natural Gas Ltd. Links > Magnolia Website > EPCC Release > Meridian Release

Oregon LNG. FERC issued an order (Apr. 17) stating that the Final FEIS for this West Coast project would be released on Feb. 12, 2016, with the final decision on Oregon LNG’s request for FERC authorization of the proposed import/export project made by May 12, 2016. The project is located near the confluence of the Skipanon and Columbia Rivers in Warrenton, Oregon. It would export 9.3 mtpa of LNG beginning in 2019 or 2020. Links > Oregon LNG Website

PROJECTS IN FERC PRE-FILING STAGE

Annova LNG (Exelon). FERC issued an order (Mar. 27) approving the request by Annova LNG to initiate pre-filing for a 7.0 mtpa LNG export facility in Brownsville, Texas. Annova also said (Apr. 11) that it would hold an “informational community open house” in Brownsville on Apr. 21. If constructed, the $1.3 billion Annova LNG project would begin LNG shipments by 2020. Initially aiming at markets in the Caribbean, Annova LNG is now looking at other parts of the globe. Exelon bought 96% of Annova in July 2014. Links > Annova LNG Website > FERC Order

Louisiana LNG (Parallax Energy). Parallax Energy announced (Apr. 28) that it had acquired Louisiana LNG Energy, LLC, a firm developing a 5.2 mtpa LNG export project in Plaquemines Parish, Louisiana, on the Mississippi River between New Orleans and Venice. Louisiana LNG initiated the FERC process in July 2014, and has applied for permits from DOE to export LNG. The first Parallax project, Live Oak LNG, was announced earlier this year and is to be located near Lake Charles. Links > Parallax Energy Website > Acquisition Release

Port Arthur LNG (Sempra). FERC granted (Mar. 31) Sempra LNG’s request to initiate pre-filing for a 10 mtpa LNG export terminal in Port Arthur, Texas. The project, on a site approved by FERC in 2006 for an LNG import facility, would consist of two 5 mtpa trains. Sempra says that it plans to start construction in 2017 and to export LNG beginning in 2021. This would be the second U.S. LNG export terminal for the company. Sempra owns 50.2% interest in the Cameron LNG project, which is fully subscribed. Links > Port Arthur LNG Website > FERC Order

Rio Grande LNG (NextDecade). FERC (Apr. 13) granted requests by NextDecade subsidiaries—Rio Grande Pipeline and Rio Grande LNG—to initiate pre-filing procedures on two 42-inch, 130-mile gas pipelines and a 27 mtpa LNG export facility. Rio Grande proposes to build a total of six LNG trains (in two 13.5 mtpa phases). Links > Rio Grande LNG Website > FERC Order

Venture Global Calcasieu Pass. Venture Global LNG said (Apr. 14) that Chart Energy & Chemicals will provide its mid-scale modular technology and Tecnicas Reunidas will provide the engineering design for Venture Global’s Calcasieu Pass Project in Cameron Parish, Louisiana. Venture Global also announced (Apr. 1) that Tom Newton has joined the company as Vice President of Engineering, (Mar. 17) that Stephen H. Del Regno is Senior Vice President LNG Marketing (based in Tokyo), and (Feb. 11) that it had raised a total of $125 million in equity financing (from undisclosed sources). Venture Global plans to export 10 mtpa of LNG beginning in Q4 2019. Links > Venture Global LNG Website