BROWNSVILLE, RGV – With untold billions worth of investment pending, two proposed Liquefied Natural Gas export businesses have announced the start of the process to explore the development of LNG transfer stations at the Port of Brownsville.
On Thursday morning, both Texas LNG and Annova LNG LLC filed their request with the Federal Energy Regulatory Commission (FERC) to begin reviewing development of natural gas liquefaction at the Port.
In total, five companies have said they intend to file with FERC to develop LNG terminals at the Port of Brownsville. Gulf Coast LNG and Next Decade LNG have not publicly announced the start of their pre-filing process as of Thursday morning, but are slated to announce soon.
On March 9, Houston-based Texas LNG was the first export facility to initiate the FERC pre-filing process, which kicks off an intensive regulatory review in order to build its LNG export facility in Brownsville by 2020.
Houston-based Annova LNG LLC, which is majority-owned by Exelon Generation, followed up with its own request to FERC on March 11, announcing the start of its review of the potential development for a mid-scale natural gas liquefaction and transfer facility, which will also be located at the Port tentatively by 2020.
“Our project will definitely provide an economic catalyst to Brownsville, and we are absolutely delighted to part of the community in South Texas,” said Texas LNG COO Langtry Meyer in a phone interview with the Rio Grande Guardian. “We feel very welcome in the region, and obviously the amount of investment that goes into this project is immense. You are talking about over $1 billion.”
Liquefied natural gas (LNG) is a natural gas made up of mostly methane that has been converted to liquid form for ease of storage and transport. Because of its density, it’s especially cost-efficient to transport over long distances.
Initiating the pre-filing with FERC is a major milestone for LNG projects. It’s an intensive application process to ensure that projects meet all environmental, engineering and safety requirements before an Environmental Impact Statement (EIS) is developed.
Meyer said Texas LNG will spend tens of millions of dollars during the pre-filing process, which he hopes to complete by the end of 2015. Texas LNG is expected to file a total of 13 comprehensive resource reports covering environmental aspects, water, impact on fish and wildlife, vegetation, cultural resources, socioeconomics and soil.
FERC is responsible for giving approval to construct and operate LNG sites. Texas LNG says it expects that announcement by 2017. The start of LNG production could begin by 2020, Meyer said.
Texas LNG is planning to build a site on 625 acres close to the mouth of the Gulf of Mexico. Its Brownsville project will consist of two phases, each with LNG production of two million tonnes per year. The company estimates more than 600 construction jobs during the construction phase, and about 80 full-time operational jobs.
“To go through the FERC process requires significant resources both capital wise, we need teams of experts, consultants, lawyers, engineers to support this rigorous process,” Meyer said. “It’s very capital intensive. So this is why really only commercially advanced projects that have the resources can really enter the FERC application process. That’s why it’s a big milestone for us.”
Annova LNG’s facility is slated to sit beside the Brownsville Ship Channel on 650 acres designated by the Port of Brownsville for industrial use, about eight miles from the Gulf of Mexico.
Construction of that project would support an average of 675 on-site jobs over a four-year period, which translates to $324 million in direct labor income for Texans, according figures provided by Annova LNG following an economic analysis completed in February 2015.
Once operational, the facility would employ about 165 workers at an average salary of $70,000 a year.
“Brownsville is an ideal location for this potential facility,” said Annova president David Chung in a statement. “If we move forward, the project will be built with private funds, not taxpayer dollars and will provide a significant economic boost to the region.”
Chung said his company’s presence at the Port of Brownsville would be a “mid-size liquefaction facility.” Annova LNG filed an application with Department of Energy for authorization to export to free trade agreement countries in October 2013.
The emergence of Liquefied Natural Gas terminals are “game changers” for the Port of Brownsville, Port Director Eduardo Campirano recently told the Rio Grande Guardian.
The Cheniere facility in southeast Louisiana, for example, is an $18 billion investment, Campirano said, trying to put the magnitude of these projects into perspective.
Campirano said one LNG terminal would produce 3,000 construction jobs over a four year period. Once they are up and going they will generate about 200 jobs that pay on average about $85,000 a year.
“A lot of us would line up for that regardless of what we are doing. You are talking about an order of magnitude for the region that is substantial. That is only one. Remember there is a potential for five,” Campirano said.
Last December, the Lone Star Chapter of the Sierra Club issued a 12-page report stating the LNG terminals at the Port of Brownsville could bring “industrial pollution, the risk of disaster, and habitat destruction to the Rio Grande Valley.” The report was titled “The Environmental Impacts of Liquefied Natural Gas on the Rio Grande Valley.” Since then, the group has warned that LNG facilities at the Port of Brownsville could hurt tourism on South Padre Island.
Campirano disputes this analysis.
“Safety is paramount for any new large industrial concern at the Port of Brownsville,” adding that the LNG industry in the United States has an “excellent” safety record. “The industry as a whole has technical and operational guidelines that address safe and secure operations of these facilities. There are multiple layers of protection that ensure the safety of the workers at these facilities as well as the safety of the communities in which they are located,” Campirano said.
Campirano said the same holds true for LNG vessels. “There are multiple codes, standards and regulations that apply to the LNG industry to maintain safety of the operation of LNG facilities, and the transfer and transportation of LNG.”
Campirano also said there is “rigorous regulatory control” over the LNG industry in the United States. He said there are four primary federal agencies that have specific regulatory enforcement roles in the U.S. They are the Department of Energy (DOE), the Federal Energy Regulatory Commission (FERC), the U.S. Department of Transportation (DOT) and the U.S. Coast Guard (USCG).
“The FERC is the agency that is responsible for the siting and construction of onshore and near shore LNG import and export LNG facilities. FERC requirements address every aspect of LNG construction and operations including engineering and design, operational safety and delivery, location and geographic risk, etc.,” Campirano said.
“Each proposed LNG project must submit to the FERC a pre-filing followed by a full submittal of it plans before any permit for the construction of an LNG facility can be approved. In addition, as the lead federal agency for the permitting of these facilities, the FERC implements all of the National Environmental Policy Act (NEPA) requirements. NEPA requires all federal agencies consider the environmental impact of these proposed facilities.”
Editor’s Note: Bill Harris, community outreach manager for Exelon Generation, told KURV News Talk 710 on Friday that Annova LNG “will hold an Open House at the community center in Brownsville on April 21.”