Nearly two years after filing an application at FERC, Freeport LNG Development LP has been approved to construct its fourth train at its natural gas export facility on Quintana Island near Freeport, TX.
Train 4 is designed with a nominal liquefied natural gas (LNG) production capacity of 5.1 million metric tons/year (mmty), the Houston-based company said when it applied to the Federal Energy Regulatory Commission in July 2017 [CP17-470]. That would bring the total export capability of the four-train facility to more than 20 mmty.
"This capacity will spur economic growth in the United States and abroad while helping improve the environment internationally," said FERC Chairman Neil Chatterjee. FERC has approved a total 7.99 Bcf/d of natural gas export capacity since February, Chatterjee said.
"This is an important milestone in the continued growth of Freeport LNG," said Freeport CEO Michael Smith. "Having FERC's approval in hand brings us one significant step closer to our goal of moving ahead with Train 4 construction later this year."
Freeport LNG expects approval from the Department of Energy by midyear to export Train 4 volumes worldwide, i.e. to nonfree trade agreement countries. Train 4 operations are expected to begin in 2023.
About 13.5 mmty of the total capacity has been contracted under 20-year tolling agreements to Osaka Gas Trading & Export LLC, Jera Energy America LLC, BP Energy Co., Toshiba America LNG Corp., and SK E&S LNG LLC, with another 0.5 mmty contracted to Trafigura PTE Ltd. under a three-year sale and purchase agreement beginning in 2020.
The party line divisions that have been apparent in several recent FERC votes, with Democrats Cheryl LaFleur and Richard Glick calling on Republicans Chatterjee and Bernard McNamee to more thoroughly consider greenhouse gas emission impacts, were evident again Thursday. Glick went so far as to suggest that he and Chatterjee work together to draft legislation that would clarify that FERC has the authority to examine a project’s impact on climate change.
"In addition to the issues discussed in my past concurrences, which I won't repeat, this case raises the issue of having done an environmental assessment, rather than an environmental impact statement, which I believe heightens the legal risk of the Commission's continued failure to assess the significance of direct greenhouse gas emissions," said LaFleur, who nevertheless voted to approve Train 4.
"As I've said many times, I believe the Commission can and should work to assess the significance of climate impacts as part of our NEPA [National Environmental Policy Act] analysis, as we do for so many other environmental impacts. I expect that if we don't do so ourselves, the courts will likely require us to do so."
However, according to McNamee, FERC met all of its environmental responsibilities in the Freeport LNG docket.
"I know there's a running debate about it, but I emphasize that we have considered all the environmental effects, including greenhouse gases," McNamee said.
The prospects for increased LNG exports from the United States leaped forward last September when FERC issued environmental schedules for a dozen pending terminal projects, including Freeport’s fourth train, and signed a memorandum of understanding with the Pipeline and Hazardous Materials Safety Administration to coordinate the siting and safety review of FERC-jurisdictional LNG facilities.
Since then, there has been a flurry of LNG export activity at FERC. The Commission is poised to take action on five other export applications this summer, including Gulf LNG (CP15-521), Annova LNG (CP16-480), Corpus Christi (CP18-512), Texas LNG Brownsville (CP16-116) and Eagle LNG (CP17-41).