LNG

The US Gulf LNG export project proposed by pipeline company Kinder Morgan for Pascagoula in Mississippi is moving forward on the regulatory front with the Federal Energy Regulatory Commission and other agencies.

Gulf LNG is an existing import terminal that is being transformed into a liquefaction plant to produce around 11.5 million tonnes per annum of LNG for export.

The Pascagoula terminal had originally been constructed to import LNG cargoes from Angola in southwest Africa from a production plant developed by international oil companies, including Chevron Corp.

However, the US shale-gas boom made LNG imports into the US uneconomic and Kinder later decided to consider the export option.

Gulf LNG, co-owned by Kinder Morgan and several US equity funds, has just notified the FERC about the progress of the project and the issue of the final environmental impact statement.

The company said that on March 15, 2019, the Pipeline and Hazardous Materials Safety Administration, now playing a more active part of the FERC process, issued its letter of determination.

This stated that it had reviewed the company’s application and determined that it had demonstrated that the siting of the project complies with Federal Pipeline Safety Standards.

In addition, the company had submitted three replies through March 4, 2019, to data requests from FERC staff on the Draft Environmental Impact Statement (DEIS).

Gulf LNG added that it was working on an update to the Mississippi Department of Environmental Quality’s Permit to Construct and Operate Air Emissions Equipment and an update to the US Army Corps of Engineers certification in relation to the Rivers and Harbors Act.

“The comment period on the DEIS closed on February 25, 2019 and FERC is presently engaged in drafting the Final Environmental Impact Statement,” said Gulf LNG.

The Gulf terminal was originally owned by US pipeline company El Paso and later acquired by Kinder, which has sold 50 percent of the project to US equity funds.

The Pascagoula terminal is located next to the Bayou Casotte Navigation Channel and already includes a five-mile send-out pipeline and two LNG storage tanks, each with a capacity of 160,000 cubic metres.

It is interconnected to several downstream pipelines, including Transco, Florida Gas Transmission, the Destin Pipeline and the Gulfstream Natural Gas Pipeline from where feed-gas can be transported for processing and export from Pascagoula.

This is Kinder's second LNG export project and it is currently completing the Elba Island export plant near Savannah in the state of Georgia.

In addition to the storage tanks and pipeline, the terminal has a single dock facility that is currently permitted to receive LNG carriers of up to 170,000 cubic metres capacity and is designed to handle even larger vessels.

An earthen berm would also be constructed extending from the northeast to the southeast boundaries of the terminal expansion site. This would be connected to new segments of the storm surge protection wall on the coast.

The project is 50 percent owned by Kinder Morgan subsidiary Southern Gulf LNG Company, while 30 percent is held by Thunderbird LNG, a unit of the Blackstone Group fund managers.

The remaining 20 percent is held by Gulf LNG Holdings, comprising Arc Logistics Partners and Lightfoot Capital Partners equity funds.