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Cheniere Ordered to Shut Two Sabine Pass LNG Storage Tanks Pending Investigation

Cheniere Energy Inc. has shut two of the five storage tanks at the Sabine Pass natural gas export terminal in Cameron Parish, LA, after several issues were discovered in January by employees and federal officials.

The Pipeline and Hazardous Materials Safety Administration (PHMSA) launched an investigation last month and ordered the two tanks shut at the liquefied natural gas (LNG) export facility, currently the only one in the Lower 48 shipping gas overseas.

Each of the five tanks has 3.4 Bcfe capacity, a total of 17 Bcfe.

Cheniere subsidiary Sabine Pass Liquefaction LLC was ordered “to take the necessary corrective actions” to protect the public, property and the environment from potential hazards associated with the releases. A thorough assessment is required before the company may seek permission from the Federal Energy Regulatory Commission to return the tanks to service.

According to PHMSA, Cheniere employees on Jan. 22 discovered that natural gas was leaking into a containment ditch around Tank S-103.

Cheniere spokesman Eben Burnham-Snyder told NGI on Monday that at around 9:30 p.m. on Jan. 22, “an area operator observed vapor and a small amount of LNG in a tank containment area and notified the control room at approximately the same time as an area gas detection alarm initiated,” he said. “Cheniere’s safety protective systems functioned as designed and applicable safety procedures were immediately initiated as required.”

The company’s procedure for responding to a tank issue like the one discovered “was immediately started by our trained operators and in-house emergency response team,” said Burnham-Snyder. “The plant alarm was sounded for all personnel to report to the safety muster points for accountability of the approximately 107 people on site and an exclusion zone was established around Tank 103."

The tank was “taken offline within minutes and the LNG release quickly subsided, as there was no breach of or leak from the inner tank containing LNG. Deinventory of the tank was started within an hour. Tank 103 is currently not in operation.”

After beginning an investigation of the release, PHMSA’s Office of Pipeline Safety (OPS) “learned that Tank S-101 also had experienced releases of LNG from the inner tank into the annular space” and was “actively” leaking gas vapors at 14 sites along the base of the tank.

“This raises the possibility that the conditions which resulted in the incident may be present in multiple tanks,” PHMSA said in its corrective order [No. 4-2018-3001H].

No injuries resulted, and there were no reported fires or explosions.

PHMSA said Cheniere could not “validate the exact source or amount" of leaked LNG, nor could it identify the circumstances that allowed the LNG to escape containment in the first place.

“Exposure of LNG to the carbon steel outer tank resulted in cooling of the outer tank wall to a temperature far below its design temperature of -25° F,” PHMSA order said. “These cracks propagated to a length of approximately one to six feet in length in a short amount of time, because when steel fails at low temperatures, it fails in a brittle manner. Brittle failures do not leak before failing so there is no warning before failure.”

Cheniere has been ordered by PHMSA to conduct a root cause analysis, assess whether the issues discovered at the two tanks apply to the other tanks and develop plans to repair or modify them. Cheniere also has been ordered to provide records of any other leaks or events in which the tank systems were operated "outside design specifications."

According to PHMSA, all five of the LNG storage tanks were designed by Mitsubishi Heavy Industries Ltd. Three tanks placed into service in 2008 were built by Matrix Service Inc., and two tanks that went into service in 2009 were built by Zachry Industrial Inc. The two leaking tanks were built by Matrix; the third Matrix-built tank did not have any leaks and remains in service.

“Safety is Cheniere’s No. 1 priority, and we want to stress that there was and is no immediate danger to our community, workforce, or our facility from this incident, nor is there any impact on LNG production,” said Burnham-Snyder. “Cheniere has initiated an event investigation and is currently working with experts on a repair plan. We will continue to work with PHMSA to safely and quickly address this incident.”

There currently are “10 independent expert companies working on site in support of the root cause analysis investigation and development of repair plans,” Burnham-Snyder said. Cheniere is working with PHMSA “to safely and quickly address this incident.”

The Sabine Pass facility most recently was processing “about 3 Bcf/d of gas in the past couple weeks,” he said. “We continue to operate normally.”

In response, Sierra Club staff attorney Nathan Matthews said, “This incident is a reminder that the expansion of LNG projects poses a grave threat to our communities and our climate. It’s a relief that no one was hurt, but allowing the facility to continue to operate until it’s clear how widespread these issues are would be extremely reckless.”

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