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Freeport LNG project clears environmental, safety review with US FERC staff

Highlights

A three-train natural gas liquefaction and export facility Freeport LNG plans to build on Quintana Island, Texas, would not have significant environmental or safety impacts, Federal Energy Regulatory Commission staff said Friday.

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In a draft Environmental Impact Statement, commission staff said that the facility, which would have a liquefaction capacity of 1.8 Bcf/d, "would result in mostly temporary and short-term environmental impacts."

"The impacts would not be significant except for traffic, noise and aggregate impacts on the residents of the Town of Quintana during construction," the EIS said.


Freeport's plans include modifications to an existing LNG vessel berthing dock, transfer pipelines, a pretreatment plant, unloading arms and an access road system.

There are no alternatives to the proposed project "that would result in less environmental impact that would still address the purpose and need of the Projects," the draft EIS said.

The draft EIS, which includes a number of recommended mitigation measures, said the impact of the LNG export project on waterbodies, wetlands, socioeconomics, public safety and air quality "would not be significant."

While the draft EIS did say the project would have "significant and unavoidable noise impacts" to Quintana residents, if certain mitigation measures were taken, then "operational noise and vibration would be minimized and not result in a significant impact on residents."

Public comments on the draft EIS will be accepted until May 5 and Freeport expects to receive FERC approval for the project by mid-2014. The first train at the proposed facility expected to start operations roughly 45 months after that approval, the company has said. The second and third trains are expected to begin operation roughly six months and one year, respectively, after that.

In November, the Department of Energy gave Freeport conditional approval to ship an additional 400,000 Mcf/d of gas as LNG from the facility to countries that do not have free trade agreements with the US. It was Freeport's second such approval following a May order that would allow the firm to ship 1.4 Bcf/d to non-FTA countries.

Freeport has signed five 20-year liquefaction tolling agreements with three Japanese companies -- Osaka Gas, Chubu Electric Power and Toshiba -- as well as BP and Korea's SK E&S. The US has an FTA with South Korea.

These five agreements cover the minimum production capacity of Freeport's planned three trains.

Freeport LNG has four limited partners: Freeport LNG Investments, which is owned by Michael Smith; ZHA FLNG Purchaser; Texas LNG Holdings, a subsidiary of Dow Chemical; and Turbo LNG, a subsidiary of Osaka Gas.

--Brian Scheid, brian.scheid@platts.com
--Edited by Katharine Fraser, katharine.fraser@platts.com