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LNG, Market-Based Storage, Creditworthiness Top Agenda as Wood's Term Nears End

Approval of liquefied natural gas (LNG) import terminals, market-based rates for gas storage and gas creditworthiness issues are high on FERC's agenda as Chairman Pat Wood gets ready to depart the agency at the end of the month.

The Federal Energy Regulatory Commission has set a deadline of 30 days for industry and others to comment on the final environmental reviews of four major LNG terminal projects that are pending at the agency, and hopes to act on the projects this month or in July, said Wood at the Center for the Advancement of Energy Markets conference in Washington, DC last Monday.

The projects are ExxonMobil's Golden Pass LNG terminal and pipeline project along the Gulf Coast; ExxonMobil's Vista del Sol terminal and pipeline facilities near Corpus Christi, TX; the Weaver's Cove LNG terminal near Fall River, MA; and KeySpan LNG's proposed conversion of an existing storage terminal in Providence, RI, to an import terminal.

"We're going to have all the permitting for this first generation [of LNG import facilities] done by the end of the year probably... There might be some that come in the door a little late," Wood told reporters.

"I don't...know if there'll [ever] be another wave" of LNG projects like the one that the market is seeing now, he said. "I do think that there will be a bunch right now, and one or two every couple [of] years thereafter as the market...grows."

He projects that the current batch of LNG terminal projects in the United States "will bring us down from the $7 [gas]...to $4 [or] $5" gas. But for this to happen, "we need to have them [LNG terminals] all around the continent," Wood said. "I've never shied away from that."

As for the Commission's authority over LNG facilities, Wood remains steadfast that the agency has "exclusive jurisdiction" over the siting of LNG terminals in the United States. Former FERC Commissioner William Massey, now a partner in the DC law firm of Covington and Burling, agreed that FERC has sole authority over LNG now. He said this shouldn't be weakened by the courts or Congress.

In addition to LNG, Wood said the Commission currently is exploring whether it should issue a notice of inquiry (NOI), notice of proposed rulemaking (NOPR) or policy statement on market-based rates for gas storage services. He declined to say whether something would be released before he leaves the Commission on June 30.

FERC also is planning to respond to a NOPR , issued in February 2004, in which the Commission spelled out a set of minimum standards for interstate natural gas pipelines to follow when assessing the creditworthiness of their shippers, Wood said. He indicated that commissioners are talking about whether they will do a rule.

As for when the White House will name someone to succeed Wood as commissioner, Wood said, "I do not know...I had hoped that would be happening sometime in June." He declined to speculate on who would succeed him as commissioner and chairman.

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