The Biden administration has officially paused the Department of Energy (DOE) review on non-Free Trade Agreement (non-FTA) LNG export licenses in order to update how the DOE considers the impact of new terminals. In years prior, the DOE export license was somewhat of a rubber stamp once projects had already received their Federal Energy Regulatory Commission (FERC) authorization. But DOE licenses are becoming a major hindrance to project's moving forward. In the spring, the DOE updated its policy on license expiry dates – re-affirming that projects would have seven years to begin exporting LNG or they lose their license – and tightening the requirements of receiving an extension on that license.
Effectively, a project needs to already be under construction to be considered for an export license extension. Otherwise, the project has to file for a new license, like Energy Transfer’s Lake Charles LNG project, which filed for a new permit in August. This pause puts the fate of Lake Charles in further jeopardy, as both Energy Transfer and the project’s existing offtakers have been petitioning the DOE to rule on the projects, new export license in an expedited manner as it is at risk of its offtake contracts expiring.
This pause is also extremely impactful to Altamira LNG in Mexico, which was expected to begin commissioning at the end of last year but is still awaiting it non-FTA export license, severely limiting where the project can export to if it does start up. Venture Global’s Calcasieu Pass and Plaquemines LNG both have small volumes of LNG from design capacity increases under review by the DOE but can operate within their original export licenses in the meantime. A number of other pre-FID projects also have licenses pending, and this may delay other FIDs as well, in particular Venture Global’s CP2 and Cheniere’s Corpus Christi midscale expansion. Both projects have enough commercial sales to take FID (on phase 1 in CP2’s case) but are awaiting regulatory permits including their DOE non-FTA export licenses.
