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Louisiana’s Driftwood LNG gets FTA export license

  • Märkte: Natural gas
  • 02.03.17

The US Department of Energy (DOE) has authorized the Driftwood LNG project along the Gulf coast to export up to a gas equivalent of 4.1 Bcf/d for up 30 years to countries that have free trade agreements (FTAs) with the US.

The proposed multi-billion-dollar terminal near Carlyss, Louisiana, is being developed by Tellurian Investments, founded in early 2016 by former Cheniere Energy chief executive Charif Souki and former BG Group chief operating officer Martin Houston. The project would include a 74-mile (119km) pipeline to bring feed gas.

Driftwood hopes to start construction in the second quarter of 2018 and come on line in stages, beginning in the second quarter of 2022 and reaching full production by the second quarter of 2025. The project must sell long-term liquefaction capacity on a take-or-pay basis to get financing, but so far it has not announced any deals. France's Total, a major LNG trader, in December acquired a 23pc stake for $207mn, with the goal of marketing LNG from the facility.

Driftwood has told the US Federal Energy Regulatory Commission (FERC) that the terminal would have capacity of 26mn t/yr, which under conversion rates used by most US LNG projects would be equivalent to 3.3-3.6 Bcf/d of gas — less than the export authorization that it received from the DOE.

Driftwood has also applied for a license to export up to the same volume to non-FTA countries, but the DOE will only consider that application if the project gets environmental clearance from FERC. US LNG export projects typically need non-FTA licenses because most of the world's major LNG-consuming nations by volume, including Japan and all European countries, do not have FTAs with the US.

The DOE is required to quickly approve FTA applications because such exports are presumed to be in the national interest. So far it has approved or given pending approval for long-term LNG exports to FTA nations of up to a gas equivalent of 54.86 Bcf/d, significantly more than the current global LNG trade of about 35 Bcf/d.

The agency must determine if non-FTA exports are in the national interest before approving them, and so far it has only authorized long-term non-FTA exports of up to a gas equivalent of 16.7 Bcf/d.

Driftwood in June 2016 entered FERC's required pre-filing review process, designed to identify major permitting issues and stakeholders before a formal FERC application is filed for construction authorization. Driftwood has said it plans to file the formal application this month and hopes to get construction approval in March 2018.


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