As had been expected, FERC late Wednesday authorized Freeport LNG Development LP to site, construct, and operate facilities to liquefy and export domestic natural gas from its existing liquefied natural gas (LNG) import terminal near Freeport, TX.

The U.S. Department of Energy (DOE) has approved Freeport LNG's export of LNG to free trade agreement (FTA) countries and has conditionally approved exports to non-FTA countries.

Freeport is the third LNG export project authorized by the Federal Energy Regulatory Commission (FERC). There are currently 10 export projects that have filed formal applications pending before the Commission, and there are three such projects in the pre-filing process.

The Freeport Liquefaction Project includes a liquefaction plant with three trains, each with a capacity of 4.4 million metric tons per annum (mtpa), for total liquefaction capacity of 1.8 Bcf/d. The project also includes pretreatment plant facilities that will interconnect with several pipelines, as well as facilities to allow bi-directional flow of gas through the existing Freeport Pipeline.

FERC also authorized Freeport LNG's Phase II Modification Project, which would revamp the previously authorized but yet-to-be-constructed Phase II Project. The Modification Project includes three major components: reorientation of the Phase II dock, modification of the transfer facilities, and modification of access roads at the terminal.

The two projects would be constructed together at Freeport’s existing Quintana Island terminal in Brazoria County, TX. FERC adopted Commission staff's environmental recommendations in requiring that Freeport adhere to more than 80 conditions to mitigate potential environmental harm.

Analysts at ClearView Energy Partners LLC said in a note Thursday morning that the approval came 44 days after the project's final environmental impact statement was posted (see Daily GPI, June 16), a period about in the middle of guidance. The release of the order outside of a regular meeting suggests that FERC could issue further Natural Gas Act Section 3 orders when they are ready, rather than waiting for a meeting, ClearView said.

With the Freeport approvals, FERC has authorized construction of facilities with capacity to export up to 6.2 Bcf/d worth of LNG. Requests for rehearing of the Freeport authorizations are due by Aug. 29; ClearView said there probably will be some.

The Commission's most recent previous export project approval was for Sempra Energy's Cameron LNG export project in Louisiana (see Daily GPI,June 19); a rehearing request on that order from the Sierra Club was rejected by the Commission on Tuesday. Next up is the Cove Point Liquefaction project in Calvert County, MD, which has been repeatedly challenged by environmentalists and local opponents (see Daily GPI, June 17). Unless there is further delay, look for a Cove Point authorization from FERC in late August or in September, ClearView said Thursday.

In its Freeport order, FERC specifically declined again to address issues related to increased natural gas production that has been stimulated by exports. "We decline to address the claims raised by either the Sierra Club or Freeport LNG as they concern impacts associated with the exportation of the commodity natural gas, rather than the proposals before the Commission," the order said.

“...[T]he Commission’s review is limited to the economic and environmental impacts of the proposal before us…[T]here is no connection between the projects before us and any specific, quantifiable induced production.”

Freeport LNG has received all authorizations required from the U.S. Department of Energy to export the entire LNG production volume of its 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).

DOE's non-FTA approval last year of exports from Freeport garnered industry criticism as it based the volumetric approval on the facilities capacity authorization Freeport had requested from FERC (see Daily GPI, Nov. 21, 2013). "There is no basis for authorizing exports in excess of the maximum liquefaction capacity of a planned facility," DOE said at the time.

Since then, DOE has proposed and received comments on a plan that would revamp the approval process, making it necessary for a project to receive FERC approval before its export license application would be considered by DOE (see Daily GPI, May 29). The rationale behind the change is that with it, DOE would be expending its efforts only on the projects most likely to come to fruition. However, the proposed change has been criticized by developers for placing the more-costly FERC project review before the less-costly DOE export license review (see Daily GPI, June 4).

The comment period for the DOE proposal closed July 21, noted ClearView, but DOE has yet to finalize a new process. In question now is the timing of DOE's lifting of the conditional status of Cameron's previously granted non-FTA export license, the analysts at ClearView said.

Separately on Thursday, DOE gave conditional non-FTA export license approval to LNG Development Co. LLC (Oregon LNG) (see related story), making it the sixth project to receive such approval, not counting Cheniere Energy’s Sabine Pass LNG, which has final non-FTA export authorization. The other projects with conditional non-FTA licenses are Freeport, Cameron, Cove Point, Jordan Cove and Lake Charles Exports.