FERC staff has issued a favorable environmental assessment on Phase II of the Freeport LNG project on Quintana Island south of Houston, saying that with appropriate mitigation the project — to increase LNG sendout from 1.75 Bcf/d (peak) to 2.5 Bcf/d — does not constitute a major federal action significantly affecting the quality of the human environment (CP06-361).

The project sponsor is Freeport LNG Development LP. The expansion is considered a small project, not subject to the more rigorous environmental impact statement process.

Construction currently is under way on Phase I of the import terminal in Brazoria County, TX and is expected to be completed in early 2008. Phase II, including a second marine berthing dock and unloading facilities, expanded vaporization, 7.5 Bcf/d of underground storage and a third LNG storage tank, would go online in 2008-2009.

Almost 40% of Phase II capacity is already sold to MC Global Gas Corp., a subsidiary of Mitsubishi Corp. and ConocoPhillips. Freeport LNG is in the process of commercializing the remainder of Phase II (approximately 0.7 Bcf/d) beginning in 2009.

After Sept. 30, 2009, Phase I capacity is fully contracted under two separate long-term terminal use agreements with ConocoPhillips for 1 Bcf/d and The Dow Chemical Co. for 0.5 Bcf/d. However, as part of its arrangements with ConocoPhillips, Freeport said it has retained 0.5 Bcf/d of capacity from commercial start-up to Sept. 30, 2009. This capacity is being marketed either as short-term capacity or as part of the planned expansion of the facility.

Deliveries would be made into the Texas intrastate pipeline system in the Stratton Ridge area.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.