Commonwealth LNG gets authorization from FERC

The proposed 8.4mn t/yr Commonwealth LNG project has received authorization from the US Federal Energy Regulatory Commission (FERC) to site and construct the gas export project.

FERC voted 5-0 today to grant a federal certification to the proposed $4bn project, which would be sited near Cameron, Louisiana. The project's developers intend to reach a final investment decision by the third quarter of 2023, which would support commercial operations beginning in 2026.

Commonwealth LNG had initially hoped to receive approval by FERC by early last year so the project could come on line in 2024. But the permitting process dragged on as federal regulators applied more scrutiny on natural gas infrastructure related to issues such as climate change and environmental justice.

FERC chairman Richard Glick voted in support of the project despite reservations about the project's environmental effects, which include 3.5mn metric tonnes/yr in projected greenhouse gas emissions from running equipment needed to chill and compress natural gas into LNG.

"I still am at a loss as to why we don't assess the significance of greenhouse gas emissions," Glick said during the agency's monthly meeting.

The project will still need a separate natural gas export license from the US Energy Department, which will be responsible for evaluating if allowing the project is in the public's interest.

US consumer groups are urging President Joe Biden's administration not to issue additional LNG export licenses until they prepare a more detailed analysis on how it might increase domestic prices. Critics say the US Energy Department has been approving export projects based on the assumption that US natural gas output would automatically keep pace with rising LNG exports.

"That assumption is completely false," Public Citizen director Tyson Slocum said. "What we've seen in the natural gas fracking industry, just as in the oil fracking industry, is capital discipline."

US LNG exports averaged 11.1 Bcf/d in the first half of the year, and projects that are under construction should increase peak liquefaction capacity to 19.7 Bcf/d by 2025, according to the US Energy Information Administration. The US has already approved more than a dozen LNG projects that, if built, would more than double that export capacity.

By Chris Knight