Finally, FERC issues its Orders after recent lobbying by various senator and approval to proceed by The State of Louisiana.
MB has finally succeeded in getting this major milestone ticked off with the help of JB & EM and their teams. LNG should be proud of its achievements in this exhaustive process. Tick.
FERC issued an order today granting Magnolia LNG, LLC's application to construct and operate a liquefaction and LNG export terminal at Lake Charles, La. and Kinder Morgan Louisiana Pipeline LLC’s application to construct an interconnected pipeline.
In approving the applications, FERC rejected arguments by Allegheny Defense Project and Sierra Club that FERC should find that Magnolia LNG’s application is contrary to the public interest because (1) “in addition to the direct impacts from construction and operation of the terminal, the exportation of gas will induce natural gas production activities with attendant adverse environmental impacts,” and (2) the project “will result in indirect environmental impacts from the combustion of exported gas in importing markets and exports may result in increased domestic gas prices that will result in increased reliance on coal as fuel at industrial and electric generation facilities, causing further adverse environmental impacts.”
FERC concluded that construction of the proposed facilities is an environmentally acceptable action if they are constructed and operated as described in the final Environmental Impact Statement and with the environmental mitigation measures included as conditions in the order.
So now with this critical gating item removed, we'll find out if a further BTA gets signed off in the very near-term. Remember immediately after the FEIS was issued in November, the EPC contract was signed.
And how ironic, FERC should approve going into the weekend when all eyes are on Doha and what OPEC may - or more likely - may not do.
Now for the next BTA - even if it's a year after Meridian (whose website still refers to future offtake). Watch this space.
And whilst the next BTA may not come immediately, FERC's Order removes one of the last critical gating items from a regulatory standpoint for those more serious counterparts who completed numerous drafts to step up if conditions align for their own purposes.
And with the EPC expiring on 30/4/16, there's now extra motivation to close the remaining capacity, but don't expect a complete unpicking of the EPC if BTA negotiations are incomplete by this stage.
