Brownsville, Texas — Having three LNG export terminals built in Brownsville, Texas, within a similar time frame would have cumulative impacts on shoreline erosion and habitat loss of certain protected species, US regulators said Friday.
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It remains to be seen whether the language in the draft environmental impact statement issued by the US Federal Energy Regulatory Commission for the Texas LNG project, which was similar to the wording in the draft EIS that was issued October 12 for NextDecade's Rio Grande LNG project, presents permitting challenges for any of the developers down the road. Exelon-backed Annova LNG has also proposed an export terminal for Brownsville.
The port in Brownsville, at the southern tip of Texas along the Gulf of Mexico, is underutilized, making the three projects important to the region's growth prospects. None has announced any firm long-term offtake agreements or a positive final investment decision, as the second wave of US developers face pressure from buyers for shorter, more flexible contracts.
"Texas LNG is the smallest of the three proposed Brownsville LNG projects and should have the smallest contribution to cumulative impacts," Chief Operating Officer Langtry Meyer said in an email. "Texas LNG's draft EIS represents another major milestone as Texas LNG advances towards final investment decision anticipated end of 2019."
NextDecade declined to comment on the cumulative impact concerns cited by FERC. The company said only that it remains on track to receive its final EIS in April 2019 and a FERC order in July 2019. A final investment decision is expected in the third quarter of 2019.
A spokesman for Annova LNG, Jimmy Porch, said the developer believes that when its draft EIS is issued by FERC, which is expected to occur in December, it can address the cumulative impacts concerns through its "proposed mitigation measures."
In the draft EIS for Texas LNG, FERC said that, on its own, environmental impacts could be mitigated to levels that would not be significant. But when factoring in the other two projects in the geographic scope, FERC said the result would be "significant cumulative impacts from sediment/turbidity and shoreline erosions within the Brownsville Ship Channel during operations from vessel transits; on the federally listed ocelot and jaguarundi from habitat loss and potential for increased vehicular strikes during construction; and on visual resources from the presence of aboveground structures."
NextDecade's draft EIS also referred to "significant cumulative impacts" from the three projects being built in proximity to each other and within a similar time frame.
Texas LNG has signed term sheets for long-term capacity with LNG buyers in China, Southeast Asia and Europe. It hopes to reach firm deals in the months ahead, as well advance engineering plans for the project. Startup of the first phase of production of 2 million mt/year of LNG is targeted to begin in 2023.
NextDecade's Rio Grande LNG is proposing a Brownsville terminal with six liquefaction trains, with a total design capacity of 27 million mt/year. It has secured nonbinding contracts with customers covering LNG to be produced at its facility.
On Monday, Annova LNG said that Black & Veatch and Kiewit Energy Group made an equity investment in the project. Terms were not disclosed. Both firms were awarded the engineering, procurement and construction contract for the 6 million mt/year project. The developer is targeting commercial operations to start in 2024.
Exelon's CEO said in March 2017 that the company wanted to find partners to help finance and perhaps take an active role in the Annova LNG project if it gets regulatory approval and decides to proceed.
-- Harry Weber, Harry.Weber@spglobal.com
-- Edited by Joe Fisher, firstname.lastname@example.org