Daily GPI / NGI All News Access / Liquefied Natural Gas (LNG)

Increased Sabine Pass LNG Production, Export Capacity Approved by FERC

FERC on Thursday approved a request from Sabine Pass Liquefaction LLC (SPL) and Sabine Pass LNG to increase the maximum peak day liquefied natural gas (LNG) production and export capacity for Trains 1-4 at the Sabine Pass LNG terminal to 2.76 Bcf/d.

When the Federal Energy Regulatory Commission (FERC) gave its stamp of approval to Sabine Pass in 2012, plans called for facilities to liquefy and export up to 2.2 Bcf/d of domestically produced gas (see Daily GPI, April 17, 2012).

The increased LNG production and export capacity can be achieved with no additional construction or modification of previously authorized facilities, the company told FERC.

In its application, Sabine Pass said it calculated the original capacity of its trains using "conservative" design and operating assumptions and that through the project's design progression it has obtained more precise information detailing the project's applicable equipment specifications. Sabine Pass also said that it has implemented design changes approved through the FERC's implementation plan review process that result in higher LNG production capability.

The proposal had been opposed by Sierra Club, which argued that increased exports of LNG would have economic impacts including higher domestic gas prices and the elimination of jobs in manufacturing and other domestic industries. But those issues are outside FERC's jurisdiction, the Commission said in its order.

"As discussed in the 2012 Order, DOE [the U.S. Department of Energy] has exclusive jurisdiction over the export of natural gas as a commodity. DOE has delegated to the Commission authority to approve or disapprove the construction and operation of particular facilities, the site at which such facilities will be located, and with respect to natural gas that involves the construction of new domestic facilities, the place of entry for imports or exit for exports. However, the DOE Secretary has not delegated to the Commission any authority to approve or disapprove the import or export of the commodity itself or to consider the type of issues raised by Sierra Club, as part of the Commission's public interest determination.

"Thus, the issue of whether the export of LNG will cause economic harm is beyond the Commission's purview. Our authorization alone will not enable the export of any additional volumes of LNG."

DOE recently granted SPL authorization to export 314 Bcf of LNG per year from the Sabine Pass LNG terminal to countries with which the United States has a free trade agreement (see Daily GPI, Feb. 3). The authorization was to cover any "surplus" LNG made available by the project's Trains 5 and 6 that is not already contracted for export under sale purchase agreements with Total Gas & Power North America Inc. or Centrica plc. The term of the authorization is 20 years (see Daily GPI, Sept. 25, 2013; March 7, 2013).

SPL has told DOE that it has the ability to source gas for liquefaction and export in large volumes in the spot market or under long-term agreements.

The Sabine Pass terminal is located on more than 1,000 acres along the Sabine Pass River on the border between Texas and Louisiana, in Cameron Parish, LA.

ISSN © 2577-9877 | ISSN © 1532-1231

Recent Articles by David Bradley

Comments powered by Disqus