FERC Approves LNG Export Project

by Morgan Lewis

[authors: Mark R. Haskell, Brett A. Snyder, and Pamela C. Tsang]

Sabine Pass is granted an NGA Section 3 authorization to site, construct, and operate facilities to liquefy and export domestically produced natural gas.

On April 16, the Federal Energy Regulatory Commission (FERC) granted Sabine Pass Liquefaction and Sabine Pass LNG (collectively, Applicants) authorization to construct and operate facilities to liquefy and export domestically produced natural gas at the existing Sabine Pass Liquefied Natural Gas (LNG) terminal in Cameron Parish, Louisiana.[1] The project will be constructed in two stages, each with two LNG process trains containing gas treatment facilities, gas turbine-driven refrigerant compressors, cold boxes and heat exchangers for cooling and liquefying natural gas, waste heat recovery systems, and other facilities. Upon completion, the terminal will operate simultaneously as a bi-directional LNG facility for export and import service. The facilities will enable the companies to liquefy and export up to 16 million tons per annum, or 2.2 Bcf per day. Sabine Pass Liquefaction has secured 20-year LNG Processing Services Agreements with entities in Great Britain, Spain, India, and Korea to sell 3.5 million metric tons of LNG per year to each entity.

Some commenters raised concerns that exporting domestically produced natural gas would have adverse effects on domestic consumers, the U.S. energy supply, and national security. FERC found, however, that these concerns were directly related to the effects of exporting the commodity, rather than the effects of the facilities used for such export and were therefore beyond the scope of FERC's authority. The Secretary of the Department of Energy (DOE) delegated to the Commission the authority to approve or disapprove the construction and operation of facilities and the site of their location under NGA Section 3. FERC determined that this delegation of authority does not permit FERC to approve or disapprove the import or export of the commodity or to consider its implications or the resulting economic and public benefits.[2]

FERC determined that the project will not have a significant impact on the quality of the human environment and can be constructed and operated safely. It prepared an environmental assessment (EA) with the cooperation of the DOE, U.S. Army Corp of Engineers, and the Department of Transportation. FERC determined that an EA, instead of an Environmental Impact Statement (EIS), was appropriate because all of the proposed facilities would be within the footprint of the existing LNG terminal, which was previously the subject of an EIS, and because the issues that needed to be considered were small in number and well defined.

FERC rejected the arguments of environmental groups that FERC must consider the cumulative effects from other potential LNG export projects and the environmental effects from increased shale gas production. FERC determined that, because no other entity had filed an application for Section 3 authority for LNG exports, any effects from such projects were speculative. Similarly, FERC observed that there was no direct tie between exports from the Sabine Pass terminal and any particular shale formation and that Sabine Pass exports could come from any source of natural gas. Therefore, FERC concluded, any effects from additional shale gas development were not "reasonably foreseeable" as defined under the environmental regulations and were not an "effect" of the project to be considered in a cumulative effects analysis. The EA concluded that the project does not constitute a major federal action significantly affecting the quality of the human environment, eliminating the need for an EIS.

FERC ordered Sabine Pass LNG and Sabine Pass Liquefaction to complete construction and have the proposed facilities available for service within five years.

[1]. Sabine Pass Liquefaction, LLC and Sabine Pass LNG, L.P., 139 FERC ¶ 61,039 (2012). FERC granted Sabine Pass LNG authorization under Section 3 of the Natural Gas Act (NGA) to site, construct, and operate the terminal in 2004 and subsequently authorized it to construct additional storage tanks and expanded vaporization systems to increase the send-out capacity in 2006.

[2]. However, FERC observed that DOE's finding that there was substantial evidence of economic and public benefits such that the authorization was not inconsistent with the public interest. DOE/FE Order No. 2961 (2011).


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.

© Morgan Lewis | Attorney Advertising

Written by:

Morgan Lewis

Morgan Lewis 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.
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 info@jdsupra.com. 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: info@jdsupra.com.

- 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.