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FERC Extends Construction Schedule of Port Arthur LNG Project

FERC on Monday granted a request of Port Arthur LNG LP and Port Arthur Pipeline LP to extend the in-service date of the related projects near Port Arthur, TX, until 2014.

Phase I of the liquefied natural gas (LNG) terminal project was originally targeted for in-service by the winter heating season of 2008-2009, and Phase II was expected to become operational as early as 2010, but no later than 2015. But citing existing permitting delays and construction realities, Port Arthur LNG asked FERC to give it five years to put Phase I into operation, and an additional three years for Phase II, for a total eight-year construction schedule for both phases.

"Port Arthur LNG states that it cannot meet the mandated timetables because certain nonjurisdictional construction (pipeline and highway relocation) must be completed before the construction site for the Phase I terminal facilities can be released. That nonjurisdictional activity, however, cannot commence until Port Arthur LNG receives all final environmental approvals and permits, some of which are still pending," the order on rehearing said [CP05-83].

"Even after all permits and approvals are received, Port Arthur LNG indicates that it will take anywhere from six to 24 months to complete the nonjurisdictional projects before construction of the terminal facilities [can] commence. Once started, Port Arthur states that actual construction of the terminal will take approximately three years to complete," it noted.

"Experience has shown that development of a successful LNG project requires the devotion of a significant amount of time and effort during both the pre- and post-authorization stages. Therefore, we will modify our July order [approving the project] to require that Phase I facilities be constructed and placed in service within five years of the issuance of the original order," FERC said. "The Phase II facilities shall be constructed and placed in service three years after that, or within eight years of the issuance date of the [July] order."

Phase I would permit the terminal to send out 1.5 Bcf/d of regasified LNG. Construction of Phase II would increase the sendout capability by an additional 1.5 Bcf/d of gas on a firm basis. Affiliate Port Arthur Pipeline proposes to build and operate a 70-mile, 36-inch diameter pipeline leg, which would interconnect with Transcontinental Gas Pipe Line, and a three-mile pipeline leg to Natural Gas Pipeline Company of America in Jefferson County.

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