U.S. Energy Department Clarifies Status of LNG Export Applications

The U.S. Energy Department on Dec. 10 provided clarity regarding the status of various applications to export Liquefied Natural Gas to non- Free Trade Agreement countries. Of particular interest have been the Venture Global CP2 LNG and Commonwealth LNG applications. The Biden Administration on Jan. 26 announced a temporary pause on all pending applications seeking authorization under Section 3 of the Natural Gas Act to export LNG to non-FTA countries until the department updates its underlying economic and environmental analyses going forward.

The department has stated it cannot complete its review of these two applications, until after the Federal Energy Regulatory Commission (FERC) concludes the environmental reviews and issues final merit orders.  As it stands, the CP2 and Commonwealth LNG applications to export U.S. sourced natural gas as LNG to non- FTA countries are still in the process of environmental reviews, and the department is unable to complete its own independent review until other agency procedures are completed.

In November, FERC issued notices with the timetable for supplemental environmental reviews  for the CP2 and Commonwealth project. The FERC notices require that each review tackle concerns related to FERC’s analysis of the cumulative air quality effects specific to the CP2 project’s nitrogen oxide and PM2.5 emissions and the Commonwealth project’s nitrogen oxide emissions, which could affect nearby communities.

Commonwealth LNG intends to construct and operate a natural gas liquefaction plant that aims to liquefy and export LNG to foreign markets. Domestically produced natural gas would be sourced from the existing interstate and intrastate pipeline systems of Kinetica and Bridgeline, respectively, in southwest Louisiana. Meanwhile, CP2 LNG intends to export LNG from its proposed LNG terminal site, and associated facilities, to any country that has, or in the future will have, the capacity and trade agreements in place to import LNG via ships.

The department also provided a list of applications for non-FTA LNG exports that are undergoing environmental review before other federal agencies, noting that the department cannot complete its own review until the other agency processes.