A portion of the decades-old and underutilized High Island Offshore System (HIOS) in the Gulf of Mexico (GOM) could live again as a component of Delfin LNG LLC’s proposed deepwater floating liquefied natural gas (LNG) export facility, which could be the nation’s first such facility.

HIOS LLC has asked FERC for authorization to abandon a 66-mile, 42-inch diameter mainline, a pig launcher and the system’s platform at West Cameron Block 167 in the GOM so that they can be repurposed for use by Delfin LNG.

Post-abandonment, the remaining HIOS facilities would be nonjurisdictional gathering, it said. The abandoned facilities would fall under the jurisdiction of the Maritime Administration (MARAD) and U.S. Coast Guard (USCG), as would the other offshore facilities of Port Delfin.

“HIOS was originally granted a certificate of public convenience and necessity almost 40 years ago,” HIOS told the Federal Energy Regulatory Commission [CP16-20]. “At its peak in 1981, HIOS transported approximately 1,800,000 MMBtu of gas per day. During October 2015, HIOS transported only 62,351 MMBtu/d, less than 4% of its peak. Further declines are expected in the future. This declining throughput will require HIOS to repeatedly raise its rates to recover its cost of service. Unless something changes, shippers on HIOS will have to bear these increasing rates.”

While natural gas flowing to the onshore from the GOM on the HIOS system is in decline, hopes are high that some of the abundant output from onshore plays will make its way to the Gulf Coast for export to global markets as LNG. Delfin wants to be a part of that.

Delfin recently decided to increase the capacity of its planned four moored floating LNG vessels from 2 million tonnes per annum (mtpa) each to 3 mtpa each and has amended its application with MARAD and USCG to reflect this. It also has filed at FERC to increase the capacity of the onshore feed gas pipeline associated with the project [CP15-490].

Onshore, the Delfin project would return to service a 1.1-mile segment of an existing 42-inch diameter pipeline and appurtenant facilities (formerly known as U-T Offshore System but now owned by Delfin subsidiary Delfin Offshore Pipeline LLC). Delfin would add 120,000 hp of compression in two equal stages and related facilities, as well as install supply header pipelines, according to its application amended to reflect the pipeline needs of a larger liquefaction project. Previously, Delfin had sought FERC authorization to construct 40,600 hp of compression in the project’s first stage and 30,000 hp of compression in stage two.

“Other than the proposed amount of compression and related facilities, Delfin LNG’s proposal and its request for authorization in the application have not changed” from the previous application, it said.

Delfin told FERC it expects MARAD and USCG action on its Deepwater Port Act application during the fourth quarter of 2016. It asked the Commission to approve its application to coincide with the approvals anticipated from MARAD/USCG.

The Delfin project would be constructed in two stages, with the first to be built during 2017-2018 and the second constructed in 2020.

Delfin filed its application with MARAD and USCG in May (see Daily GPI, May 11). In March Delfin signed a memorandum of understanding with BTG Pactual Commodities for liquefaction capacity of the project’s first vessel (see Daily GPI, March 6). The MOU made BTG Pactual — an investment bank based in Brazil — the project’s anchor customer. BTG has the option to expand its tolling arrangement to include liquefaction capacity of additional vessels under development by Delfin.

More recently, Enbridge Inc. acquired a 5% equity position in Delfin owner Fairwood Peninsula Energy Corp. and struck an agreement to assist in developing offshore LNG facilities in the GOM (see Daily GPI,July 1).