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Annova LNG pushes
FERC for permit
decision
TEXAS
EXELON-BACKED Annova LNG is pushing the US Federal Energy Regulatory Commis- sion (FERC) to make a decision on a permit for the company’s proposed export terminal at the Port of Brownsville, Texas. Annova LNG’s CEO, Omar Khayum, noted in a letter to the FERC that was made public this week that the agency had previously set a deadline of July 18 for “all fed- eral action” on the company’s permit application. However, he said the deadline had passed with no action taken.
“Our potential customers and investors rou- tinely cite delay in commission action on the pending permit as a critical issue in their deci- sion-making process on key commericial activ- ity,” Khayum wrote in his letter.
Annova LNG is seeking to build an export terminal with a capacity of up to 6mn tonnes per year (tpy). The company began the FERC pre-filing process in March 2015 and filed its official application for the terminal in July 2016. The FERC issued a final environmental impact statement (EIS) on the project in April. FERC staff found in the EIS that while Annova LNG would have adverse environmental impacts, these could mostly could be reduced to less than significant levels if recommended mitigation measures were implemented.
Two other LNG projects proposed for the Port of Brownsville – Rio Grande LNG and Texas LNG – are also still awaiting final approval from the FERC. The three projects face opposi- tion from a coalition known as Save RGV From LNG, which includes Rio Grande Valley shrimp- ers, fishermen, environmentalists and local res- idents. The regulator has expressed concern about the cumulative impact of the terminals on traffic, noise and habitat fragmentation of the endangered ocelot, jaguarundi and aplomado falcon when combined with other projects in the area.
Annova LNG has tried to address these con- cerns, noting in regulatory filings that it is plan- ning to use electric motors to reduce noise and emissions at its plant, as well as developing a 185- acre (0.7-square km) wildlife corridor. The com- pany said it would build a concrete wall along the boundary of the wildlife corridor that would furtherreducenoiseandlight,aswellaskeeping animals out of the plant.
Last week Khayum also told the Houston Chronicle that Annova LNG would also source all of its power requirements for the LNG termi- nal from renewables. The company, which has
Also last week, pipeline operator Enbridge confirmed that it had bought a 10.5% stake in Annova LNG.
signed a facilities agreement to buy 405 MW of power from the South Texas Electric Coopera- tive and Magic Valley Electric Cooperative, is planning to issue a request for proposals (RfP) through its electricity providers. Khayum said the power purchase agreement (PPA) would complement the company’s plans to use electric motors.
“When we come online, we’ll be the lowest carbon-emitting LNG facility in the world per unit of production,” Khayum said.
Speaking on the sidelines of the GasTech conference in Houston last week, Khayum told the Houston Chronicle that Annova LNG would need to sell two-thirds of its proposed production – or 4mn tpy – before the company can make a final investment decision (FID). The company has not yet sold contracts for any its production, but Khayum expressed confidence that the project’s size would help it attract buyers.
“The benefit for us is that we have a smaller midscale facility, which increases the probability ofreachingafinalinvestmendecision,”Khayum said. “There’s more confidence in execution and more confidence in getting deliveries of cargoes, which is what customers want to see.”
Also last week, pipeline operator Enbridge confirmed that it had bought a 10.5% stake in Annova LNG.
“This minority equity investment aligns with our strategic priority of maintaining a low-risk model that generates reliable, growing cash flow anddividends,”Enbridgesaidinastatement.
Enbridge also is participating in NextDec- ade’s Rio Grande LNG project by partnering with the developer on the Rio Bravo pipeline.
Exelon owns 80.55% in Annova LNG. Kiewit and Black & Veatch each own 4.475%.™
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