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FERC Issues DEIS for Freeport LNG Export Project

FERC staff Friday issued the draft environmental impact statement (DEIS) for the Phase II Modification Project and the Liquefaction Project proposed by Freeport LNG. Construction would entail "significant and unavoidable impacts;" however, mitigation measures would reduce other impacts "to less-than-significant levels."

The proposed Phase II Modification Project includes modification to the previously authorized liquefied natural gas (LNG) vessel berthing dock, LNG transfer pipelines, LNG unloading arms, and the access road system at Freeport LNG's existing Quintana Island terminal. The project is near Freeport, TX, in Brazoria County.

The proposed Liquefaction Project consists of the liquefaction plant at and adjacent to the existing Quintana Island LNG terminal and would provide capacity to export about 13.2 million tons of LNG per year. Freeport would install three liquefaction trains and supporting equipment capable of liquefying 1.8 Bcf/d of natural gas.

In support of the liquefaction plant, Freeport LNG plans to construct a natural gas pretreatment plant about 2.5 miles north of the Quintana Island terminal. Several interconnecting pipelines and utility lines would run from the Quintana Island terminal to the pretreatment plant.

"Construction and operation of Freeport LNG's Liquefaction Project and the Phase II Modification Project would result in mostly temporary and short-term environmental impacts," the DEIS says. "Based upon the mitigation that Freeport LNG has identified, and our conditions, we conclude that the projects would be in compliance with the Endangered Species Act (ESA), the NHPA [National Historic Preservation Act], the CAA [Clean Air Act], and the CZMA [Coastal Zone Management Act]."

Last month, major Japanese LNG buyers Osaka Gas Co. Ltd. and Chubu Electric Power Co. Inc. agreed to put up $1.2 billion of equity funding for the project. Freeport said at the time that it expects to receive FERC authorization for the project's first three trains around the middle of this year, with construction beginning on the first two trains during the second half of the year. (see Daily GPI, Feb. 28).

Freeport LNG has received all authorizations required from the U.S. Department of Energy to export the entire LNG production volume of the first three trains (see Daily GPI, Nov. 21, 2013). The minimum capacity of the three trains has been fully contracted under use-or-pay tolling agreements with Osaka Gas, Chubu Electric, BP Energy Co. (see Daily GPI, Feb. 12, 2013), Toshiba Corp. and SK E&S LNG LLC (see Daily GPI, Sept. 10, 2013).

Among the factors considered by Federal Energy Regulatory Commission staff is the fact that the site of the liquefaction plant would be an expansion of an existing, operating LNG import terminal with existing storage tanks and berthing and loading/unloading facilities. It was also noted that the project's pipeline and utility line system would follow the existing sendout pipeline and would be contained within an already-disturbed right-of-way.

Comments on the DEIS are due at FERC by May 5.

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