FERC on Wednesday granted the first certificate for a new liquefied natural gas (LNG) import terminal in the United States in more than 25 years. Sempra Energy’s $700 million Cameron LNG terminal in Hackberry, LA, will take at least three years to build, but when completed will provide about 1.5 Bcf/d of deliverability into the Gulf Coast pipeline grid.

It will be the fifth U.S. LNG import terminal, but is the first of seven other proposed terminals, FERC noted. Five more projects are pending at FERC and two more offshore deepwater terminals are pending at the Coast Guard, representing about 5.8 Bcf/d of proposed natural gas deliverability.

“The construction of new LNG import terminals is needed so that more sources of natural gas can be made available to meet the energy market’s increasing demand,” FERC staff said in a presentation on the project to the full Commission. “In the years ahead, the increasing demand for natural gas in the United States is expected to exceed currently available supplies, and thus increased imports of LNG are seen as a vital part in the nation’s energy mix.”

Sempra called it a “milestone” for the entire LNG industry. Sempra also recently received approval for a Mexican LNG project located in Baja California Norte that will serve the West Coast. Combined the two projects will be able to process 2.5 Bcf/d.

Cameron LNG will include three LNG storage tanks each capable of holding one million bbl of LNG, or about 3.5 Bcf of gas. The project also includes a 35-mile, 36-inch diameter pipeline that will extend from the terminal to an interconnection with Transcontinental Gas Pipe Line in Beauregard Parish, LA. At full operation, the terminal will have a maximum send-out of 1.5 Bcf/d.

In December 2002, the Commission issued a favorable determination on the Cameron project and initiated a new LNG regulatory policy, by not requiring the project to offer open access terminalling services or to maintain a tariff and rate schedule for such services (see Daily GPI, Dec.19, 2002). Instead the Commission said it would view new LNG terminals as it would gas production facilities, allowing LNG sales to compete with other gas sales in the Gulf Coast in the deregulated marketplace.

The new policy had a significant impact on additional LNG terminal development. Seven other projects are now seeking federal authorization. Dominion’s Cove Point LNG terminal in Maryland and El Paso’s Elba Island terminal near Savannah, GA, both built during the original LNG import boom a quarter century ago and then moth-balled, also recently reopened for import service (see Daily GPI, Aug. 26, April 10).

In its review of the Cameron project, FERC concluded that project developers must take action to address the potential impact on shipping traffic and vessel delays. In particular, FERC is requiring Sempra to file a plan with the Commission and the Coast Guard that shows how it will provide for dedicated tug boat services for LNG shipping to the Cameron terminal so that the project won’t affect the availability of tug boats for other vessels in the channel.

FERC also is requiring the project, which will affect about 55 acres of wetlands, to create at least 85 acres of coastal marsh in an area near the proposed terminal site using materials dredged from the construction of the facility.

FERC is giving Sempra five years to build the project, rather than the three years specified in its PD, so that the company will have more than adequate time for construction. The project currently has a 2007 in-service date.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.