Daily Gas Report Quotes Steve Davis on LNG, DOE Freeport Decision
SNL Daily Gas Report, in its article “DOE knock-back of Freeport won't change LNG applications, attorney says,” quoted Akin Gump energy partner Steve Davis on what he called an “interesting trend” of LNG export terminal developers adding natural gas liquefaction trains to projects already undergoing regulatory review.
At Akin Gump’s December 4 global energy media briefing, Davis had noted Cheniere Energy as a developer that had applied to the Federal Energy Regulatory Commission (FERC) for permission to add additional liquefaction trains to those already under construction and to increase total LNG production capacity.
Separately, SNL asked Davis about a decision by the Department of Energy to conditionally authorize Freeport LNG Development LP to export additional volumes of LNG to countries that do not have a free trade agreement with the United States, limiting the level of these volumes to less than a third of the requested. The Energy Department indicated that it had done so to match the total capacity (1.8 billion cubic feet per day) listed in the project’s FERC filings.
As to whether the DOE decision in the Freeport case would hurt developers’ ability to add trains mid-development or change how developers approach DOE, Davis responded, “I don't know that it's changed the way people approach the DOE applications. It seems realistic that if you have only sought a permit for a certain size of facility, why should in fact the DOE grant you authority to export more than your facility is certificated for? The key thing to remember here is people do not move forward with making capital commitments until they've got all their approvals in place. You've got a lot of development activity, and there is significant money being spent, but not on hardware - not on putting money into the ground. Even if people might hope for more, they're not actually going to go out and contract with an EPC [engineering, procurement and construction] contractor or sell capacity to a potential LNG exporter until they have all the relevant permits.”
To read more about Akin Gump’s media briefing, please click here.