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MARAD approves Delfin LNG for offshore portion of export project

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MARAD approves Delfin LNG for offshore portion of export project

The U.S. Department of Transportation's Maritime Administration approved with conditions the Delfin LNG LLC application to build and operate the offshore portion of its deepwater LNG export project.

Delfin LNG must now accept conditions set out in the decision, which include obtaining FERC authorization for the onshore facilities and mitigating impacts to the surrounding land and water.

"Once those conditions are met, MARAD will issue the license," according to Kim Strong, a spokeswoman for the agency, who added that a timeline had not been set. "It is really dependent on the applicant and how quickly they respond."

The March 13 decision, signed by MARAD Executive Director Joel Szabat and recently made public, found the Delfin LNG deepwater port would be in the national interest and would not "unreasonably interfere" with international navigation or pose other threats to vessel traffic. The project would include four floating LNG vessels at a location roughly 40 nautical miles off the coast of Cameron Parish, La., making it subject to the Deepwater Port Act.

The Fairwood Peninsula Energy subsidiary received in November 2016 an environmental impact statement from the U.S. Coast Guard. The Coast Guard found that most adverse impacts were likely to be minimal, and that without the project, international gas demand would not be met, leaving potential customers to seek other projects. The project has U.S. Department of Energy authorization to export 1.8 Bcf/d to countries with free trade agreements with the U.S. The project now awaits approval to export to non-FTA countries. FERC must approve the project's land-based components. (U.S. Coast Guard docket USCG-2015-0472, U.S. DOE docket 13-147-LNG, FERC docket CP15-490)

The developer applied to the Coast Guard and MARAD in May 2015. In September 2015, it asked to increase liquefaction capacity to 12 million tonnes per annum. The onshore portion of the project would include a natural gas compressor station, a gas supply header and a metering station at an existing facility. Four new 30-inch subsea pipeline laterals would deliver gas to the port, where the floating liquefaction vessels would cool the gas to liquid.

The offshore facilities would be able to transfer gas to "standard LNG trading carriers," according to MARAD. "It is expected that the typical LNG cargo transfer operation would be carried out within 36 hours, including LNG trading carrier berthing, cargo transfer and sail-away." Roughly 31 carriers are expected to visit each of the four 3-mtpa floating vessels a year, for a total of up to 124 cargo transfers a year.