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FERC’s Draft EIS for Gulf LNG Moves Mississippi Export Project Forward

A plan to turn Kinder Morgan Inc.’s natural gas import facility in Mississippi into an export terminal could have some adverse environmental impacts, but they could be avoided or reduced to less-than-significant levels with mitigation, FERC staff said Thursday.

Kinder is seeking to export liquefied natural gas (LNG) via the Gulf LNG Liquefaction Project in Jackson County, originally built as an import terminal. The project as designed would consist of two trains, each with capacity of about 5 million metric tons/year (mmty). Once in operation, capacity could exceed the total base level of 10 mmty by more than 10%.

Federal Energy Regulatory Commission staff, which in September indicated it would issue environmental schedules for a dozen export projects, including Gulf LNG, concluded in its draft environmental impact statement (EIS) “that approval of the proposed project, with the mitigation measures recommended in the EIS, would have some adverse environmental impacts; however, these impacts would be avoided or reduced to less-than-significant levels” [No. CP15-521-000].

Gulf LNG has requested approval to construct and operate onshore liquefaction facilities, as well as modify and build interconnection and metering projects for the existing pipeline.

Approval also has been requested to modify existing metering stations at Gulfstream Pipeline Co. and Destin Pipeline Co. interconnection facilities, as well as the existing Gulf LNG Pipeline. Several federal agencies cooperated with FERC in preparing the EIS. In addition, because the Mississippi Office of the Secretary of State has jurisdiction over the wetland mitigation property, it also was a cooperating agency.

Kinder CEO Steve Kean in September said contracts for Gulf LNG could be structured in a similar way to the company’s Elba Liquefaction Project in Savannah, GA, which has 10 liquefaction units and about 2.5 mmty of capacity. Elba is supported by a 20-year contract with a unit of Royal Dutch Shell plc.

Kean said Gulf LNG also could include a long-term off-take agreement with “someone who is willing to take on the risk and opportunity” and “place the molecules in the international market.”

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