The first natural gas export facility on the U.S. West Coast is facing regulatory delays, but several Gulf Coast projects have gained critical support to advance toward sanctioning.
Calgary-based Pembina Pipeline Corp., which is sponsoring the long-proposed Jordan Cove liquefied natural gas (LNG) export project in Oregon, disclosed in its first quarter results that while it still viewed the project as “viable,” it will limit capital investments for anything not related to permitting ahead of making a final investment decision (FID).
Pembina approved $50 million in incremental funding for 2019 “in support of the remaining critical regulatory and permitting work streams,” it said.
The regulatory processes for Jordan Cove continue to progress. In late March FERC issued a draft environmental impact statement (EIS) with “reasonable conditions that work with the project development process and with only minor suggested changes,” Pembina noted. A final EIS is expected to be issued by January by the Federal Energy Regulatory Commission.
Oregon permit approvals, including under the Coastal Zone Management Act and the Oregon Department of Environmental Quality 401, also are progressing, with decisions on each expected by year’s end, Pembina said.
The company wants to conclude the federal and Oregon regulatory processes and “catch up” with other project work streams.
“Given the anticipated regulatory timeline, we expect these activities to resume in early 2020, subject to receipt of the requisite FERC and State of Oregon approvals,” it said.
However, suspending some activities not related to permitting “will affect the construction schedule of the project,” with first gas now expected to be “delayed up to one year from the previously anticipated date in 2024.”
Pembina said commercialization efforts are continuing, and it has executed nonbinding offtake agreements for more than the planned design capacity of 7.5 million metric tons/year.
“Commercial discussions with prospective customers are continuing as regulatory permitting is progressed, and under the new timeline the company will work to conclude binding offtake agreements by early 2020,” management said.
Pembina had previously disclosed that given the size of this project, the company intended to seek partners for the pipeline and liquefaction facility to reduce ownership from 100% to 40-60%.
“This process to find partners is expected to commence upon securing binding off-take agreements, and under the new timeline is expected to occur in early 2020.”
Gulf Coast projects, meanwhile, continue to advance, with Houston-based Tellurian Inc.’s Driftwood LNG and Sempra Energy’s Port Arthur LNG facilities receiving approval from the Department of Energy (DOE) to export gas worldwide.
Driftwood LNG, which is proposing to export up to 27. 6 mmty from Lake Charles, LA, would be allowed to export up to 3.88 Bcf/d to any country.
Last month FERC granted authorization for Driftwood and Port Arthur; FIDs are pending.
“The U.S. will become a top three LNG exporter, and Tellurian intends to do our part in creating U.S. jobs while delivering a cleaner energy supply source to the world,” said CEO Meg Gentle.
Port Arthur was authorized by DOE to export worldwide up to 1.91 Bcf/d from its project planned east of Houston.
“The Driftwood and Port Arthur exports will ensure that U.S. LNG continues to impact our friends and allies across the globe,” said DOE Secretary Rick Perry.
Assistant Secretary for Fossil Energy Steven Winberg said DOE “continues to act quickly on LNG orders after their review at FERC.”
The United States is now in its third consecutive year as a net gas exporter, with cargoes reaching 35 countries, DOE noted. In February the United States reached 13 consecutive months as a gas exporter with a total of 4.6 Bcf/d.
FERC on Friday also issued a final EIS for the Plaquemines LNG and the companion 42-inch diameter Gator Express Pipeline Project proposed for Plaquemines Parish, LA, by Venture Global Plaquemines LNG LLC and Venture Global Gator Express LLC (No. CP17-66-000).
The export project would consist of six pretreatment facilities, a liquefaction plant to be constructed in two phases, four 200,000 cubic meter aboveground storage tanks, three loading docks and air-cooled electric power generation facilities.
FERC staff determined Plaquemines LNG would result in adverse environmental impacts, but they would be minimized to less than significant levels with proposed mitigation by the sponsor.
Meanwhile, Energy Transfer LP and Shell US LNG LLC, which are advancing the Lake Charles LNG project in Louisiana, have issued an invitation to tender (ITT) for prospective engineering, procurement and construction (EPC). The EPC contract would convert Energy Transfer’s existing LNG import facility to allow export.
The ITT follows the signing by the partners of a project framework agreement in March, outlining the commercial terms and pathway to progress development toward a potential FID of a proposed 16.45 mmty project.“We are excited to announce this major milestone in the development of the Lake Charles LNG liquefaction project,” said President Tom Mason. “The prospective bidders are world-class EPC contractors who will bring extensive LNG experience to bear as they develop their bids.”
Lake Charles LNG already is fully permitted with existing infrastructure and proximity to major pipeline infrastructure, including Energy Transfer’s vast pipeline network.
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