Page 10 - GLNG Week 31 2021

GLNG AMERICAS GLNG

Court orders further regulatory

analysis on two Texas LNG projects

POLICY THE US Circuit Court of Appeals for the DC Rio Grande LNG. A third proposed LNG termi-
Circuit ruled this week that the environmental nal, Annova LNG, had initially been included in
analyses supporting regulatory approvals for two the lawsuit, but that project was scrapped earlier
proposed Texas-based LNG export projects were this year.
deficient. The plaintiffs claimed that the FERC had
While the court did not revoke the approvals, violated NEPA because it anchored its author-
it did rule that the US Federal Energy Regulatory isations for the projects in faulty environ-
Commission (FERC) needed to carry out further mental reviews of the projects’ greenhouse
analysis on the impacts of the two projects on cli- gas (GHG) emissions. They alleged that the
mate change and low-income or minority com- facilities would “have higher greenhouse gas
Both projects would be munities in Cameron County, Texas. emissions than nearly every other project
located at the Port of A unanimous panel at the appeals court ruled FERC has reviewed”.
Brownsville. that the FERC had violated the National Envi- The court agreed that the regulator had failed
ronmental Policy Act (NEPA) with the deficient to respond to “significant” opposing viewpoints
environmental analyses on the Texas LNG and concerning the adequacy of its analyses of the
Rio Grande LNG projects. projects’ GHG emissions.
Both projects would be located at the Port of “This decision clearly demonstrates that the
Brownsville in South Texas, where local oppo- Commission has the authority and obligation to
sition to their construction has been stronger meaningfully analyse and consider the impacts
compared to other projects in different parts of from [GHG] missions and impacts to environ-
the state. Local community groups opted last mental justice communities,” said the FERC’s
year to contest the FERC’s authorisations of the chairman, Richard Glick, who had dissented
two projects in court, as well as the approval for against the projects’ approval when the regulator
the Rio Bravo gas pipeline, which would serve issued its authorisations.™
AUSTRAL ASIA

Woodside ups Scarborough’s projected costs

INVESTMENT AUSTRALIAN independent Woodside Energy of LNG production instead of 6.5mn tpy as orig-
has increased its cost estimates for the offshore inally planned.
Scarborough natural gas development ahead of a Woodside said it expected the internal rate
final investment decision (FID) planned for later of return (IRR) of the integrated Scarborough
this year. and Pluto Train 2 development to be greater
Woodside said on August 4 that it expected than 12%. The company said the project, which
the project to cost $12bn, a nearly 5% increase on anticipates delivering its first cargo in 2026,
Scarborough will supply November 2019’s estimate of $11.4bn, owing to enjoyed a globally competitive cost of supply
an expanded Pluto refreshed pricing from major contractors. at around $6.8 per mmBtu ($188.09 per 1,000
LNG. Woodside operates the Scarborough joint cubic metres) to buyers in Northeast Asia.
venture, which will supply gas from four fields Woodside acting CEO Meg O’Neill described
estimated to hold 13 trillion cubic feet (368bn the Scarborough project as “transformational”
cubic metres) of 2C dry gas to an expanded and said the updated project costs reflected a
Pluto LNG facility, in partnership with BHP roughly 20% increase in offshore processing
Petroleum. Woodside owns 73.5% of both the capacity.
Scarborough and North Scarborough fields, as O’Neill said: “Woodside’s contracting strat-
well as 50% of the Thebe and Jupiter fields. egy for Scarborough reduces cost risk, with
Woodside said the cost of the project’s approximately 90% of total project contractor
onshore component, which includes modifying spend structured as lump-sum and fixed rate
the existing liquefaction train at the Pluto LNG agreements.”
facility to process Scarborough gas as well as The executive added that the company had
building a second train, had climbed by around commenced the formal processes to sell down
3% to $6.3bn. its stake in Pluto Train 2 and Scarborough.
The expansion of Scarborough’s offshore pro- Woodside announced on July 15 that it was look-
duction capacity by 20%, meanwhile, has trig- ing to divest an up to 49% stake in Pluto’s second
gered an 8% bump in offshore costs to $5.7bn. train, while also noting that it was “testing the
The field will now underpin 8mn tonnes per year market” over the sale of equity in the gas field.™

P10 www. NEWSBASE .com Week 31 06•August•2021