Funny game this race to FID! FERC has now expedited the...

Funny game this race to FID! FERC has now expedited the regulatory process, slashing "some" terminal timelines by 9 -12 months.

The LNG projects affected by today’s issuances of regulatory schedules are: Freeport Train 4 (CP17-470), Port Arthur (CP17-20), Driftwood LNG (CP17-117), Corpus Christi (CP18-512), Texas LNG (CP16-116), Gulf LNG (CP15-521), Rio Grande LNG (CP16-454), Jacksonville Eagle (CP17-41), Annova LNG (CP16-480), Plaquemines (CP17-66), Jordan Cove (CP17-495), and Alaska LNG (CP17-178).

“Thanks to the tremendous work of our Office of Energy Projects and Office of the General Counsel, the Commission has made significant strides in streamlining our regulatory processes to adapt to the increasing number, and greater complexity, of the LNG applications we have received. These process improvements have shortened projected environmental schedules in some cases by 9 to 12 months,” said FERC Chairman Kevin McIntyre. “There is widespread acknowledgement that the United States is poised to play an important role in serving worldwide LNG demand, and its ability to serve that demand quickly will serve the nation’s national security and economic interests. Because sufficient LNG export capacity is a necessary gateway to the global gas markets, the FERC’s efficient processing of LNG facility applications will put the US in a more competitive position.”
McIntyre added, “As FERC is the lead siting agency for LNG projects, our responsibility over LNG applications is to assess the environmental effects, safety, and engineering of LNG facilities in a timely manner in accordance with our statutory obligations. Our recent streamlining efforts will provide all LNG stakeholders additional regulatory certainty and help minimize undue administrative burdens.”

FERC has issued a Final FERC Order schedule (before notice to proceed) for 3 LNG export terminals;

Venture Global 22nd January 2019 - 1yr earlier than LNG LTD has projected on the corporate presentation for the New York roadshow! Has signed up 6mt in BTAs but no EPC contract or financing in place.

Gulf LNG (11.5mt) 16 July 2019 - Brownfieled project with an estimated price tag of $8B. Already an existing LNG import terminal in Mississippi which Kinder Morgan proposes to convert to export. Will save on substantial costs due to existing infrastructure.

Alaska LNG 6 Feb 2020.


Apart from Venture Global, an update on the usual suspects nipping at our heels;

FERC has sent a Notice of Schedule for Environmental Review to Texas LNG (4mt) - should receive DEIS by this October, FEIS by mid March 2019, FERC Order set for Jun 2019 and Final FERC Order in 2nd half 2019. Hoping to begin construction by early 2020.

Driftwood - Bechtel signed an EPC contract with Tellurian for $15.2B on 14th Nov 2017. Legendary Charif Souki Chairman of Board!! FERC is expected to issue FEIS on Oct 12 2018 and FERC Order on January 10 2018... 1yr and quarter earlier than LNG LTD projection!

Golden Pass (15.6mt, estimated $10B EPC), a joint venture with ExxonMobil (majority owner), ConocoPhillips and Qatar Petroleum. Fully approved, has the ability to move towards FID faster than most because its converting an existing import terminal which has existing pipeline and port infrastructure already in place!

Delfin (13mt, estimated $8B EPC) - Fully approved by FERC. No word or update. No EPC contract.

Sabine Pass Train 6 (4.5mt) - Will reach FID whenever Cheniere wishes.

Lagging behind;

Lake Charles LNG (15mt, estimated EPC $9.2B) - Joint venture between Shell and Texas based Energy Transfer. In April 2018 they sought a permit to extend construction start deadline to November 1, 2019. The project has flown under the radar, hardly grabbing any attention leading me to believe its not a top priority for Shell at the moment.

NextDecade (27mt, estimated EPC $17.2B)  will take another year to secure a contractor to build its Rio Grande terminal in Texas after deciding not to move forward with an agreement with McDermott International. Citing the engineering firm's need to find a partner to be able to financially guarantee its work on a project of Rio Grande's size, NextDecade said (on Sept 4th) it would submit the job to a competitive bidding process. The contractor disclosure reflects the challenges faced by developers of the second wave of US liquefaction facilities -- ranging from construction costs (not our worry) to commercial deals -- even as permitting concerns are being eased by FERC committing to speed up approvals. An EPC contract is now expected to be reached in the 3rd quarter of 2019, prior to a final investment decision.

So... as the sun sets at the end of the day, regardless of FERC giving a helping hand to our rivals, we still keep plodding along in pole position. Don't underestimate the difficulties in securing an EPC contract + financing... Rio Grande projecting nearly a year to lock in an EPC contractor is evidence!

May the sell off of the SP continue... as a LLTH it matters not in the end!


JK