Federal regulators, unsatisfied with Cheniere Energy Inc.’s progress in completing a list of corrective measures following the mandated shutdown of two liquefied natural gas (LNG) storage tanks in early 2018, told the leading U.S. exporter that neither tank would be allowed to return to service until the previously agreed upon actions were completed.
In a Tuesday letter to Cheniere, FERC and the Pipeline and Hazardous Materials Safety Administration (PHMSA) said that the Houston-based LNG developer has yet to complete a number of corrective measures that were agreed upon after leaks were detected at the two tanks in February 2018. Each tank has 3.4 Bcfe capacity.
“At this time, neither agency is prepared to authorize the approval of a return to service until the requirements identified as necessary prior to cool down are completed,” the agencies said.
The Federal Energy Regulatory Commission and PHMSA also noted that neither agency had provided such authorization for either tank, and that any work done to return the tanks to service prior to completion of requirements identified as necessary prior to cool down “is at your own risk.” PHMSA indicated that it had previously conveyed its concerns to Cheniere regarding the premature filling of one of the tanks with perlite.
Much of the testing, documentation and installation set forth as requirements has been previously requested by FERC and/or PHMSA staff, the agencies said. “For example, Sabine has failed to comply with prior requests to test the shell and floor plates” for one of the storage tanks and provide documentation of the testing to both agencies.
“Therefore, at this point, it has become necessary to more formally issue” the requirements based on Cheniere’s “failure to provide the requested items during the course of the post incident process,” the agencies said.
Cheniere, in an emailed response to NGI, said it “will continue to work with our regulators to safely bring these tanks back to service, after receiving authorization from PHMSA and FERC. We are analyzing the letter from the agencies and will provide a formal response. We have been responsive and forthcoming throughout this process, and will continue to be.”
Among the requirements needed before a return to service are an examination of the concrete pile caps for cracking and to assess their structural integrity; a complete structural reinspection of all LNG storage tanks at its Sabine Pass LNG terminal; ultrasonic and penetrant testing inspections on the bottom and top piping support inside the tanks’ dome area; and a host of other inspections, examinations and documentations.
Within two months after the tanks’ return to service, Cheniere must also provide FERC and PHMSA with the results of a required destructive test; a detailed engineering analysis and procedure for the potential reinstatement of LNG flow through the bottom fill lines; a detailed report describing any and all differences between the as-built tank drawings and discrepancies discovered during tank entry inspections; as well as several other reports and findings.
Even without the two storage tanks in operation, Cheniere has continued to dominate the U.S. LNG export market, bringing online five production units at Sabine Pass and two at its Corpus Christi facility. In June, the company pulled the trigger on a sixth train at Sabine Pass, and management has indicated it continues to eye a massive expansion at Corpus Christi.