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Magnolia LNG expansion passes additional environmental review

LNG Ltd.'s plan to boost the production capacity of its proposed Magnolia LNG LLC export terminal in Louisiana cleared an additional environmental review by the Federal Energy Regulatory Commission.

FERC staff in a draft supplemental environmental impact statement issued Sept. 27 said the expansion project would do some environmental harm. This could be reduced to "less than significant levels" by the developer implementing mitigation measures recommended by the commission. The project would raise the production capacity of the four-train terminal from 8 million tonnes per annum to 8.8 mtpa of LNG.

Since the expansion would not involve any change in the site of the already-authorized original project, FERC staff did not assess any site alternatives.

"Furthermore, we conclude that Magnolia LNG's design of the modified facilities, with the recommended mitigation measures, would include acceptable layers of protection or safeguards that would reduce the risk of a potentially hazardous scenario from developing into an event that could impact the offsite public," the staff wrote in the review.

The Magnolia LNG project would be built in Calcasieu Parish, La. The developer sought the capacity expansion of 0.8 mtpa in November 2018, telling FERC that the uplift would not require additional construction or facility modifications beyond what the commission had already approved. The developer said the expected volume of vessel traffic and the 1.4-Bcf/d feed gas rate would not change either.

FERC released an environmental assessment report in December 2018 that said the application "would result in no additional environmental impacts." But in January, the commission requested engineering information, leading to a decision to pursue a lengthier environmental review in June after it identified "potential environmental concerns." (FERC dockets CP14-347 and CP19-19)

LNG Ltd. expects to make a final investment decision on Magnolia LNG in 2020, CEO Greg Vesey said in an interview with S&P Global Market Intelligence and S&P Global Platts earlier in September. Vesey cited the ongoing trade war between the U.S. and China as one factor that could move the decision back.

S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.