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DOE's LNG Review Protocol Reset Takes Effect

The U.S. Department of Energy (DOE) has finalized changes it proposed earlier this year to its protocol for reviewing applications to export liquefied domestic natural gas to non-free trade agreement (FTA) nations.

The final changes become effective with their publication in the Federal Register Friday (Aug. 15). With the changes, DOE will only begin its final non-FTA export authorization review for a liquefied natural gas (LNG) export project once the project has completed the environmental review process at FERC.

DOE announced the proposed changes in late May (see Daily GPI, May 29). The impetus was to "...ensure our process is efficient by prioritizing resources on the more commercially advanced projects, while also providing the department with more complete information when applications are considered and public interest determinations are made," DOE's Christopher Smith, principal deputy assistant secretary for fossil energy, said in a blog post at the time.

Not everyone was pleased. Excelerate Energy CEO Rob Bryngelson blasted the proposed change for putting the much more costly Federal Energy Regulatory Commission review process before the less onerous DOE process. In other words, a project backer could invest millions to get through FERC only to be thwarted at DOE (see Daily GPI, June 4).

The changes do away with DOE's previous procedure of granting "conditional" authorizations to export to non-FTA countries. However, previously granted conditional approvals are being retained for consideration, noted analysts at ClearView Energy Partners LLC in a note Thursday.

While projects with conditional or final non-FTA export approvals total 10.52 Bcf/d in capacity, the lone project with final non-FTA export authorization -- Cheniere Energy Inc.'s Sabine Pass in Louisiana -- is approved for 2.2 Bcf/d.

In ClearView's estimation and by DOE's standards, there are three export projects that are "ready for final action" at the department. These are the expansion of Sabine Pass Trains 1-4, Cameron LNG and Freeport LNG. ClearView expects the Cameron project to be the next DOE non-FTA approval granted, assuming an appeal by the Sierra Club of FERC's rejection [due to tardiness (see Daily GPI,July 23)] of its request for rehearing at the Commission is denied.

Capacity of the original Sabine Pass authorization combined with capacities of the Sabine Pass Trains 1-4 expansion, Cameron and Freeport total 6.2 Bcf/d, ClearView noted. That volume is near the low end of the 6-12 Bcf/d of LNG exports considered by DOE in its previous public interest study, the analysts said.

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