DOE Conditionally Approves Lake Charles Terminal LNG Exports to Non-Free Trade Agreement Nations

by Akin Gump Strauss Hauer & Feld LLP

On August 7, 2013, the U.S. Department of Energy, Office of Fossil Energy (DOE/FE) issued an Order Conditionally Granting Long-Term Multi-Contract Authorization to Export Liquefied Natural Gas by Vessel from the Lake Charles Terminal to Non-Free Trade Agreement Nations (Order).  Below is a summary of the Application, DOE/FE’s findings and analysis, and the terms and conditions applicable to the Lake Charles Terminal. Please click here for a copy of the order.


On May 6, 2011, Lake Charles Exports, LLC (LCE) filed an application with DOE/FE under Section 3 of the Natural Gas Act for long-term, multi-contract authorization to export domestically produced liquefied natural gas (LNG) by vessel to nations with which the United States has not entered a free trade agreement (FTA) providing for national treatment for trade in natural gas. LCE proposed to export up to 2 billion cubic feet per day (Bcf/d) of natural gas, for a period of 25 years, commencing ten years from the date of authorization. In addition, LCE requested authorization to export LNG on its own behalf or as agent for its affiliate, BG LNG Services, LLC (BGLS), and clarified that its agreement with BGLS would have a 25-year term that would run concurrently with the requested authorization. The exports would originate from the existing LNG import terminal in Lake Charles, Louisiana, which is owned by another LCE affiliate, Trunkline LNG Company, LLC (Trunkline). 

Proposed modifications to the Lake Charles Terminal are the subject of an application by Trunkline and its affiliates before the Federal Energy Regulatory Commission (FERC) in Docket No. PF12-8.  LCE requested a conditional order approving its export authorization pending satisfactory completion of FERC’s environmental review and approval of the terminal modifications.

DOE/FE Findings and Analysis

DOE/FE noted generally that its review of export applications focuses on: (1) the domestic need for the natural gas proposed to be exported; (2) whether the proposed exports pose a threat to the security of domestic natural gas supplies; (3) whether the arrangement is consistent with DOE/FE’s policy of promoting market competition; and (4) any other factors bearing on the public interest.

Based on its review of the record, which included a two-part study of the economic impacts of LNG exports conducted by the U.S. Energy Information Administration and NERA Economic Consulting (NERA), DOE/FE found that LCE introduced evidence projecting a future supply of domestic natural gas sufficient to support both the proposed export authorization and domestic natural gas demand, and that no opponent had submitted contrary evidence. Although DOE/FE observed that NERA’s findings conflicted with LCE’s conclusion that there would be no additional impact on natural gas prices with LNG exports, DOE/FE found that, even with NERA’s estimated price increase, the study supported a finding that the United States would experience net economic benefits from increased LNG exports. DOE/FE acknowledged that commenters criticized the data inputs used in the studies, but declared that the study was fundamentally sound and supported the proposition that the proposed exports would not be inconsistent with the public interest. The DOE/FE also noted that it considered international consequences of the decision, as well as other considerations. On balance, the DOE/FE concluded that the potential negative impacts of the proposal were outweighed by the likely net economic benefits and by other non-economic or indirect benefits. DOE/FE asserted that it would continue to monitor market developments closely as the impact of successive authorizations of LNG exports unfolds, and impose terms and conditions as necessary on subsequent LNG export authorizations.

Terms and Conditions

DOE/FE granted authorization to the Lake Charles Terminal on the following terms and conditions:

  • Term of the Authorization: 20 years beginning from the date of first export. (LCE had requested a 25 year authorization).
  • Commencement of Operation: Within seven years from the date of the Order. (LCE had requested up to ten years).
  • Transfer, Assignment, or Change in Control:  Prior to any change of control, LCE must obtain approval of the Assistant Secretary for Fossil Energy. A rebuttable presumption that control exists will arise from the ownership or the power to vote, directly or indirectly, ten percent or more of the voting securities of such entity. 
  • Agency Rights: DOE/FE required that, where LCE proposes to export LNG as agent for BGLS, LCE must register BGLS with DOE/FE in accordance with the procedures and requirements described in the Order. 
  • Contract Provisions for the Sale or Transfer of LNG to be Exported: DOE/FE required that LCE file with DOE/FE, within 30 days of execution: (1) all executed long-term contracts associated with the long-term export of LNG, on LCE’s behalf or as agent for BGLS, from the Lake Charles Terminal; and (2) all executed long-term contracts associated with the long-term supply of natural gas to the Lake Charles Terminal.
  • Export Quantity: DOE/FE authorized LCE’s requested LNG exports in an annual quantity equivalent to natural gas volume of 2 Bcf/d, or 730 Bcf/yr, as set forth in LCE’s Application.
  • Combined FTA and Non-FTA Export Authorization Volume:  DOE/FE conditionally authorized the LNG export quantity to be up to the equivalent of 730 Bcf/yr of natural gas on both a standalone basis and also when combined with LCE’s authorized FTA exports pursuant to DOE/FE Order No. 2987.
  • Environmental Review: The authorization issued in this proceeding is conditioned on Trunkline’s satisfactory completion of the environmental review process in FERC Docket No. PF12-8 and subsequent certificate proceeding.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Akin Gump Strauss Hauer & Feld LLP | Attorney Advertising

Written by:

Akin Gump Strauss Hauer & Feld LLP

Akin Gump Strauss Hauer & Feld LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.