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Cheniere, PHMSA Discuss LNG Tank Leak Issues at Hearing

Federal regulators and representatives of Cheniere Energy Inc. met in Houston on Wednesday to discuss the next steps to take regarding a February order to shut down two of five storage tanks at the Sabine Pass liquefied natural gas (LNG) export terminal in Louisiana.

In a corrective action order (CAO), the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) ordered Cheniere to shut down the tanks and "take certain corrective actions" after employees discovered on Jan. 22 that LNG had leaked from one tank at the Cameron Parish, LA, facility.

PHMSA spokesman Darius Kirkwood confirmed that PHMSA’s Kristin Baldwin, an official in Pipeline Safety Law Division, presided over Wednesday's hearing at regional headquarters in Houston. He also confirmed that Baldwin would make a recommendation about the CAO within days to PHMSA’s Alan Mayberry, associate administrator for pipeline safety.

Mayberry “will make a decision on the issues raised at the hearing," Kirkwood told NGI on Thursday, noting the investigation into the incident is ongoing. "The associate administrator will decide whether the CAO should remain in effect, be modified or be terminated."

Cheniere spokesman Eben Burnham-Snyder on Thursday characterized the hearing as "productive and informative," and said both sides agreed that safety "is the No. 1 priority in this matter, and at all times.

"Cheniere believes this incident did not and does not substantially or imminently endanger public safety, and therefore the issuance of the order was not warranted, and that PHMSA's order is based on certain inaccuracies related to our facilities and operations," Burnham-Snyder said. "We remain committed to a continued productive relationship and ongoing collaboration with PHMSA on this order."

Two weeks ago, Cheniere management said it expected toquickly resolve the issues surrounding the CAO. An attorney representing Cheniere pledged that the company would continue to cooperate with PHMSA to determine the root cause of the incident.

According to PHMSA, Cheniere employees discovered that LNG had leaked into the annular space between the inner and outer walls of one tank, S-103. The leak eventually caused a crack in the outer tank wall, allowing LNG to pool in a secondary containment area around S-103. A subsequent investigation by PHMSA found that LNG had also leaked from a second tank, S-101.

Cheniere was 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 was ordered to provide records of any other leaks or events in which the tank systems were operated "outside design specifications."

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