Page 7 - NorthAmOil Week 37 2021

NorthAmOil COMMENTARY NorthAmOil

FERC declared in
March that it did have
jurisdiction over NFE’s
LNG import terminal in
Puerto Rico.

notifying the public of its plans. It said that the this means that the LNG terminal will continue
company had not upheld its obligation to draw to operate, even though the 180-day applica-
up a location consultation for the LNG termi- tion deadline set by FERC is due to expire in
nal or its responsibility to give the groups and mid-September.
communities most likely to be affected by the
project. What next?
During the regulatory review, both NFE It is not currently clear whether FERC will seek
and the Puerto Rico Electric Power Authority jurisdiction over the Gibbstown project, espe-
(PREPA), which has been using the terminal cially as opposition to it becomes more vocal.
to import LNG for regasification and delivery However, this is not the only obstacle for NFE if
to a thermal power plant (TPP) in San Juan, it attempts to move the project – on which work
pushed back against the project’s critics. NFE has been stalled for some time – forward.
argued that the commission had no reason to The company itself has said nothing recently
get involved in the matter, as the terminal was about either the Gibbstown terminal or the
built to a design that closely resembled other Wyalusing liquefaction plant in Pennsylvania,
facilities that FERC had previously ruled did where the LNG would originate. Neither project
not require authorisation under US federal law. appears on its website, nor are they mentioned
PREPA, meanwhile, stressed that shutting down in recent investor presentations. According to
the terminal would force its TPP to switch from an October 2020 filing, the Wyalusing plant was
gas to diesel, a dirtier fuel that would emit more due to begin production around the first quarter
pollution. of 2022, but given that no progress appears to
have been made on construction, it will almost
FERC ruling and court appeal certainly now be delayed.
The regulatory review did not prevent NFE NFE suffered a setback in January when The company
from wrapping up construction and then bring- Appalachia Midstream withdrew its application
ing the LNG import terminal online in March to the Pennsylvania Department of Environ- itself has said
2020. However, it drew more attention to the mental Protection (DEP) for the construction nothing recently
project – and may have influenced FERC’s deci- of a gas pipeline that would have supplied the
sion, which was finally handed down in March Wyalusing plant. about either
of this year. In late August, opponents of the LNG plant
In its ruling, the commission declared that it sought to challenge an extension for an air per- the Gibbstown
did have jurisdiction over the LNG import ter- mit for the facility, and the fact that NFE is seek-
minal and stated that NFE should have sought ing an extension suggests it still wants to move terminal or
its approval to build and launch the facility. It forward with the project, but its status appears the Wyalusing
said that it was giving the company 180 days to increasingly uncertain.
apply for official authorisation to operate the The entire plan for the liquefaction and export liquefaction
terminal – and stated that the terminal could of gas from the region still needs to overcome
remain online in the interim, as halting opera- various regulatory, logistical and legal hurdles. plant.
tions would not be in the public interest. The fact that local environmental and commu-
NFE responded by filing a petition appeal- nity groups are calling for a FERC review shows
ing FERC’s decision in the US District Court that they still view the project as having the
of Appeals for the District of Columbia in May. potential to be built. And NFE’s experience in
According to a report from S&P Global Platts, Puerto Rico shows that additional regulatory
the company is now set to proceed with the oversight can become reality once a project is
case in the federal court system. Presumably, being built, or even already operational.™

Week 37 16•September•2021 www. NEWSBASE .com P7