Export Projects Update (Sept. 2015)

LNG Allies Member Companies

Delfin LNG (Fairwood LNG). Bechtel Oil, Gas, and Chemicals said in a News Release (Aug. 04) that Fairwood LNG had entered into an agreement with Bechtel to perform front-end engineering and design (FEED) for the first U.S.-based floating liquefied natural gas vessel (FLNGV) to go into service at Port Delfin, the proposed deepwater port and floating liquefaction facility to be located some 50 miles off the coastline of Cameron Parish, Louisiana. Delfin LNG’s project will be the first offshore floating LNG facility in the United States, and this facility and the FLNGVs will together form the Port Delfin deepwater port, which falls under the jurisdiction of the U.S. Maritime Administration (MARAD) and the U.S. Coast Guard (USCG). MARAD and USCG conducted public scoping meetings for the facilities in both Louisiana and Texas in mid-August, during which local support for the proposed deepwater port was received. Fairwood also announced (Aug. 17) that Kailash Singal, a highly skilled veteran of the liquefaction industry, was appointed as the company’s engineering director.

Texas LNG Brownsville. Texas LNG unveiled (Aug. 24) a host of developments with respect to its proposed, two-phase (2 mtpa each) LNG export project in Brownsville, Texas. The company’s news release stated that: (1) BNP Paribas will assist Texas LNG in the raising of equity and debt financing for the project’s capital requirements; (2) the Federal Energy Regulatory Commission (FERC) had issued a Notice of Intent to prepare an Environmental Impact Statement (EIS); (3) that a public scoping meeting was held in Port Isabel, South Texas; (4) FEED work by Samsung Engineering was “progressing on schedule;” and (5) Phase 1 LNG shipments remain on target to commence in 2020.

Projects Under Construction

Cheniere Corpus Christi (Trains 1-3). Cheniere’s report to FERC on the status of construction of its LNG export terminal near Corpus Christi, Texas (through July 2015) states: engineering has progressed to 71.9% and that procurement has progressed to 25.9%. The status report also states that the project is now to 18.9% complete against a planned 14.1%.

Cheniere Sabine Pass. Cheniere Energy announced (Aug. 11) that Cheniere Marketing Int’l has entered into sales arrangements with Électricité de France for the delivery of LNG cargoes on an ex-ship basis from the Sabine Pass to the Dunkerque LNG import terminal in France. The sales arrangements cover the delivery of up to 26 cargoes through 2018. The sales price for the LNG cargoes is linked to the Dutch Title Transfer index (a natural gas pricing index in continental Europe).

Projects in Formal FERC Review

Calcasieu Pass (Venture Global). Venture Global LNG jumped from the pre-filing to the formal application stage (Aug. 08) when the company submitted its proposal to FERC. According to the Venture Global news release, the application “represents the culmination of nearly 11 months of rigorous engagement with FERC and other government agencies.” The project is to be located on a 506-acre site near where the Calcasieu Ship Channel meets the Gulf of Mexico. Facilities will include two ship-loading berths for LNG vessels, two full-containment LNG storage tanks, and an on-site combined cycle gas turbine power plant. Scheduled to begin construction in late 2016 and achieve full operations in late 2019, the project will have a nameplate capacity of 10.0 mtpa. A new 42-inch pipeline system, consisting of two laterals totaling approximately 43 miles in length, will be built.

Oregon LNG (Leucadia National). Oregon LNG announced (Aug. 05) that FERC has issued its draft EIS for Oregon LNG’s Warrenton, Oregon, import/export terminal. The draft EIS also covers the Oregon Pipeline connector project and the upgrade of a portion of the Williams Co. pipeline in Washington State. FERC announced (Aug. 17) that it woud hold nine public hearings on the draft EIS over eight days (an unusually large number).

Projects in FERC Pre-Filing Stage

Alaska LNG (State of Alaska and Partners). Alaska Gov. Bill Walker has told the Associated Press (Aug. 24) that he plans to recommend (to the legislatiure) that the state buy out TransCanada Corp.’s position in the project. Under an agreement that predates his administration, TransCanada would hold the state’s interest in the pipeline and gas treatment plant, with the state having an option to buy back part of that interest. During the legislative debate on the issue in 2014, it was cast as a way for the state to not have to bear as much in upfront costs as it would without that partnership. But the agreement also contains language allowing the state to terminate that arrangement, though the state would have to reimburse TransCanada for its development costs, plus 7.1 percent… an estimated $100 million.

Annova LNG (Exelon). Annova LNG held a scoping meeting at the Port Isabel Event and Cultural Center (Aug. 11) and reported that the South Texas Economic and Energy Roundtable joined Rio Grande Valley business leaders to announce their support Annova LNG’s Brownsville project. When complete, it would produce 7 mtpa of LNG which is the equivalent to 0.9 bcf/day.

Freeport LNG (Train 4). Freeport LNG said that FERC issued a notice (Aug. 19) of its intent to prepare an environmental assessment for Freeport’s fourth liquefaction train at its LNG export terminal currently under construction on Quintana Island, Texas. The Train 4 project would provide additional liquefaction capacity of approximately 5.1 mtpa of LNG for export. The first three trains of the Freeport project would produce 12.9 mtpa of LNG.

Rio Grande LNG (NextDecade). A news release (Aug. 04) from NextDecade states that it has engaged Sumitomo Mitsui Banking Corporation (SMBC) as financial advisor and mandated lead arranger for its Rio Grande LNG export project. Under the agreement, SMBC will be responsible for securing debt financing for the project. The news release states that “SMBC has extensive experience in LNG projects, having advised and arranged financing for more than 20 liquefaction and 11 regasification projects around the world, including all North American LNG liquefaction projects closed to date that were project financed.” The Rio Grande LNG project includes plans for up to 6 liquefaction trains with a nominal output capacity of 4.5 million tons of LNG per train per year. An associated project, the 140-mile Rio Bravo Pipeline, would supply Rio Grande LNG with feed gas.

Canadian Projects Using US-Sourced Gas

Bear Head LNG (LNG Ltd.). A news release from Bear Head LNG (Aug. 17) stated that Canada’s National Energy Board (NEB) has granted Bear Head LNG authorization to export up to 8 mtpa of LNG from Canada starting in 2019 with expanded authority to increase production to 12 mtpa in 2024. The export licence extends for a period of 25 years from the date of first LNG export. Bear Head was also granted a license to import 0.800 bcf/day of natural gas from the United States, an amount adequate to produce the authorized annual LNG exports. Bear Head has received its US DOE license to export to FTA nations, but the non-FTA application remains pending.

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