DOE approves latest LNG export application from Sabine Pass Liquefaction

The U.S. Department of Energy on Jan. 13 approved a November 2015 application from Sabine Pass Liquefaction LLC for blanket authorization to engage in short-term exports of liquefied natural gas (LNG) from the Sabine Pass Liquefaction Project in Cameron Parish, Louisiana.

Sabine Pass had sought authorization from DOE’s Office of Fossil Energy (FE) to export this LNG in a volume up to the equivalent of 600 billion cubic feet (Bcf) of natural gas on a cumulative basis over a two-year period commencing the earlier of the date of the first short-term export or Jan. 15, 2016, to any country with the capacity to import LNG via ocean-going carrier and with which trade is not prohibited by U.S. law or policy. Sabine Pass would export this LNG on its own behalf and as agent for other entities who hold title to the LNG at the time of export.

Said the Jan. 13 DOE decison: “Based on a review of the record in this proceeding, DOE/FE finds that it has not been demonstrated the exports proposed in the Application are inconsistent with the public interest. For reasons discussed below, we grant Sabine Pass’ Application. This authorization permits the requested LNG exports by vessel on a short-term or spot market basis from the Sabine Pass Terminal subject to the terms and conditions set forth below.”

Sabine Pass Liquefaction has its principal place of business in Houston, Texas. It is an indirect subsidiary of Cheniere Energy, which is a developer of LNG import and export terminals and natural gas pipelines on the Gulf Coast, including the Sabine Pass Liquefaction Project.

Sabine Pass said that it is currently constructing the Sabine Pass Liquefaction Project. Prior to the Jan. 13 approval, DOE/FE had issued three final long-term, multi-contract orders authorizing Sabine Pass to export LNG from Stages 1 and 2 (Trains 1 through 4) of the Liquefaction Project. In this regard, Sabine Pass currently has long-term, multi-contract authorization to export LNG up to the equivalent of 803 Bcf/yr of natural gas, for a twenty-year term, to countries with which the United States does not have a free trade agreement (FTA) that requires national treatment for trade in natural gas (non-FTA countries). In addition, Sabine Pass also has long-term, multi-contract authorization to export LNG up to the equivalent of 1,006 Bcf/yr to countries with which the United States has a FTA that requires national treatment for trade in natural gas (FTA countries). The FTA and non-FTA export volumes are not additive.

Additionally, Sabine Pass stated that in order to align its DOE/FE export authorization with the optimized design production capacity of Stages 1 and 2 of the Liquefaction Project as authorized by the Federal Energy Regulatory Commission, it has submitted an application to DOE/FE requesting long-term, multi-contract authorization to export up to the equivalent of an additional 203 Bcf per year of natural gas, for a twenty-year term, to non-FTA countries. That application is currently pending.

Sabine Pass stated that it expects Train 1 of the Liquefaction Project to be completed and commence operations in early 2016.

Sabine Pass LNG LP and Sabine Pass Liquefaction LLC jointly filed an update on Jan. 22 with the Federal Energy Regulatory Commission that covers recent construction on the project. This report covers activities of the Sabine Pass Liquefaction Project, Stages 1–3, that occurred during the month of December 2015.

  • Stage 1 Engineering and Procurement are 100% complete. Subcontract and direct hire construction work are 87.1% and 96.2% complete, respectively. Stage 1 overall project completion is 97.4% against the plan of 99.2%.
  • Stage 2 Engineering and Procurement are 100% complete. Subcontract and direct hire construction work are 51.8% and 55.3% complete, respectively. Overall project completion for Stage 2 is 79.5% against the plan of 85.7%.
  • Stage 3 Engineering is now 41.9% complete. Procurement is now 20.5% complete. Subcontract and direct hire work are 15% and 0.1%complete, respectively. Stage 3 overall project completion is 14.9% against the plan of 14.5%.

During December, Train 1 completed piping restoration on all six compressors. The ethylene compressors were run on nitrogen to heat up the waste heat recovery unit to commence system dry out process. Insulation on flanges and valves is in progress to support RFSU in January. Train 2 continued to work on above ground piping testing/restoration and electrical installation in all areas to support system turnover. Train 3 continued to work on the installation of aboveground piping in the propane refrigeration, cryo pipe rack, and compressor areas. Also, the waste heat recovery units and GT stacks were set. Train 4 continued to work on the installation of aboveground piping in cryo rack, compressor, and propane refrigeration areas. Also, work continued to set the compressor filter houses. Train 5 continued to work on soil improvement and piles were delivered to the site.

Actual project progress supports the achievement of substantial completion for Trains 1 and 2 by May 2016 and August 2016, respectively. Trains 3 and 4 targeted substantial completion dates are April 2017 and August 2017, respectively, with schedule recovery expected in the summer of 2016 as labor resource is transitioned from Stage 1 onto Stage 2.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.