The U.S. court of appeals, fifth circuit, has revoked Port Arthur LNG’s Texas state air permit. The 13.5 MMtpa terminal is currently under construction after Sempra reached a final investment decision in March this year. The court’s reason for the permit’s removal, was that the Texas Commission on Environmental Quality (TCEQ) did not impose the same emissions standards on all projects. NextDecade’s LNG project, Rio Grande, in particular has a more stringent emissions limit than Port Arthur. The court said that it was not bound by the standards imposed on Rio Grande, “but in making those individualized determinations, the Commission must demonstrate that it is treating permit applications consistently.” The ruling does not impact any of the terminal’s federal permits. Sempra has said it was working with TCEQ to resolve the issue and in the meantime, construction would continue as planned. While this is a setback for the terminal, the ongoing construction is a sign that Sempra believes it will be able to resolve the issue before the planned startup in 2027.
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Tired of Waiting for You - U.S. LNG at a Standstill Waiting Out Construction, Regulatory, Legal Delays
Russia’s invasion of Ukraine and Europe’s subsequent pivot away from Russian natural gas caused a huge resurgence in interest in U.S. LNG. That led to nearly 60 MMtpa (7.9 Bcf/d) of new U.S. LNG capacity reaching a final investment decision (FID) in 2022-23. But regulatory delays at the Federal Energy Regulatory Commission (FERC), the Biden administration’s pause on non-free-trade-agreement (non-FTA) export licenses, and legal challenges to the FERC approval process have essentially halted LNG development in the U.S. There are several LNG projects with enough commercial momentum to move forward that are stuck in regulatory or legal limbo, but even projects that have reached FID are not safe from legal challenges. In today’s RBN blog, we conclude our series on LNG delays by looking at recent court rulings and other regulatory issues and their impact on U.S. LNG development.
NextDecade Steps Back from CCS Project with LNG Terminal Under Construction
Jump In The Line, Part 5 - Sempra Will Soon Expand its LNG Export Capacity with Port Arthur LNG
Thanks to a warm start to the season and low Asian demand for LNG, Europe has so far been able to stave off a worst-case scenario for natural gas supply this winter. Still, the European market is keeping a keen eye on the years ahead, when the continent will need to rely on new sources of LNG to meet demand and refill inventories with little chance of any Russian gas. The call for more LNG has ushered in a new wave of export-project development, with two U.S. projects reaching a positive final investment decision (FID) this year and LNG offtakers in Europe and elsewhere committing to an incredible 37 MMtpa (4.9 Bcf/d) of long-term contracts from pre-FID sites in North America. This momentum has revived a number of projects from the COVID-induced wasteland, including Sempra’s Port Arthur LNG. In today’s RBN blog, we continue our series on U.S. LNG projects by taking a closer look at Port Arthur, the one most likely to take FID next.
