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FERC Issues Environmental Schedules for 12 LNG Terminals, Signs MOU With PHMSA

The prospects for increased liquefied natural gas (LNG) exports from the United States leaped forward late Friday as FERC issued environmental schedules for a dozen pending terminal projects.

The Federal Energy Regulatory Commission issued environmental schedules for Freeport Train 4 (CP17-470), Port Arthur (CP17-20), Driftwood LNG (CP17-117), Corpus Christi (CP18-512), Texas LNG (CP16-116), Gulf LNG (CP15-521), Rio Grande LNG (CP16-454), Jacksonville Eagle (CP17-41), Annova LNG (CP16-480), Plaquemines (CP17-66), Jordan Cove (CP17-495) and Alaska LNG (CP17-178).

“Thanks to the tremendous work of our Office of Energy Projects and Office of the General Counsel, the Commission has made significant strides in streamlining our regulatory processes to adapt to the increasing number, and greater complexity, of the LNG applications we have received,” said FERC Chairman Kevin McIntyre. “These process improvements have shortened projected environmental schedules in some cases by nine to 12 months…

“As FERC is the lead siting agency for LNG projects, our responsibility over LNG applications is to assess the environmental effects, safety, and engineering of LNG facilities in a timely manner in accordance with our statutory obligations. Our recent streamlining efforts will provide all LNG stakeholders additional regulatory certainty and help minimize undue administrative burdens.”

In June, McIntyre said FERC would hire more staff to address a backlog of permitting for LNG export infrastructure. Several LNG staff have since been hired, according to FERC, along with an outside contractor to assist staff in construction inspections. FERC is also working with project applicants to hire third-party contractors to conduct analyses that involve non-proprietary information.

Also on Friday, FERC signed a memorandum of understanding (MOU) with the Pipeline and Hazardous Materials Safety Administration (PHMSA) to coordinate the siting and safety review of FERC-jurisdictional LNG facilities. FERC is responsible for determining whether proposed LNG facilities are in the public interest; PHMSA is responsible for standards governing the location and design of LNG facilities.

The MOU provides that PHMSA will review LNG project applications to determine whether proposed facilities comply with the safety standards set forth in PHMSA’s regulations, and that PHMSA will issue letters to FERC stating its findings; FERC will then consider the findings in its decisions on whether projects are in the public interest.

“PHMSA’s LNG safety experts are fully prepared to analyze current and future project proposals, evaluate their potential impact on public safety, and reduce barriers to moving these projects forward,” said PHMSA Administrator Skip Elliott.

News of FERC’s updated notices of schedule and agreement with PHMSA “is overwhelmingly good for LNG exporters,” analysts at Height Capital Markets said in a research note Tuesday.

“The myriad schedules put FERC on track to approve over 165 millions tons of new export capacity by the end of President Trump’s first term, which represents a radical improvement for the industry…Most of these decisions will come throughout 2019 as the agency will spend the rest of 2018 attempting to crank out draft environmental studies at an unprecedented pace.

“Hopefully (for FERC), the partnership with PHMSA will streamline the process somewhat. We are optimistic that well-positioned and well-funded projects can keep the agency on track, and greater certainty should help both investors and buyers assess winning projects.”

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