[Federal Register Volume 76, Number 111 (Thursday, June 9, 2011)]
[Notices]
[Pages 33746-33748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14280]


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DEPARTMENT OF ENERGY

[FE Docket No. 11-51-LNG]


Freeport LNG Development, L.P.; Application for Blanket 
Authorization To Export Liquefied Natural Gas

AGENCY: Office of Fossil Energy, DOE.

ACTION: Notice of application.

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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice of receipt of an application filed on April 21, 
2011, by Freeport LNG Development, L.P. (Freeport LNG), requesting 
blanket authorization to export liquefied natural gas (LNG) that 
previously had been imported into the United States from foreign 
sources on a short-term or spot market basis. The LNG would be exported 
from the existing Freeport LNG terminal facilities on Quintana Island, 
Texas, in an amount up to the equivalent of 24 billion cubic feet (Bcf) 
of natural gas to any country that has the capacity to import LNG via 
ocean-going carrier, and with which trade is not prohibited by U.S. law 
or policy. Freeport LNG seeks to export the LNG over a two year period 
commencing on the date of the authorization on its own behalf or as 
agent for others. The application is filed under section 3 of the 
Natural Gas Act (NGA). Protests, motions to intervene, notices of 
intervention, and written comments are invited.

DATES: Protests, motions to intervene or notices of intervention, as 
applicable, requests for additional procedures, and written comments 
are to be filed using procedures detailed in the Public Comment 
Procedures section of this notice, no later than 4:30 p.m., eastern 
time, July 11, 2011

ADDRESSES: 

Electronic Filing

e-mail: [email protected].

Regular Mail

U.S. Department of Energy (FE-34), Office of Natural Gas Regulatory 
Activities, Office of Fossil Energy, P.O. Box 44375, Washington, DC 
20026-4375.

Hand Delivery or Private Delivery Services (e.g., FedEx, UPS, etc.)

U.S. Department of Energy (FE-34), Office of Natural Gas Regulatory 
Activities, Office of Fossil Energy, Forrestal Building, Room 3E-042, 
1000 Independence Avenue, SW., Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: 
Larine Moore or Beverly Howard, U.S. Department of Energy (FE-34), 
Office of Oil and Gas Global Security and Supply, Office of Fossil 
Energy, Forrestal Building, Room 3E-042, 1000 Independence Avenue, SW., 
Washington, DC 20585, (202) 586-9478; (202) 586-9387.
Edward Myers, U.S. Department of Energy, Office of the Assistant 
General Counsel for Electricity and Fossil Energy, Forrestal Building, 
Room 6B-159, 1000 Independence Ave. SW., Washington, DC 20585, (202) 
586-3397.

SUPPLEMENTARY INFORMATION: 

Background

    Freeport LNG is a Delaware limited partnership with one general 
partner, Freeport LNG-GP, Inc., a Delaware corporation, which is owned 
50% by an individual, Michael S. Smith, and 50% by ConocoPhillips 
Company. Freeport LNG's limited partners are: (1) Freeport LNG 
Investments, LLLP, a Delaware limited liability limited partnership,

[[Page 33747]]

which owns a 20% limited partnership interest in Freeport LNG; (2) ZHA 
FLNG Purchaser LLC, a Delaware limited liability company and wholly 
owned subsidiary of Zachary American Infrastructure, LLC, which owns a 
55% limited partnership interest in Freeport LNG; (3) Texas LNG 
Holdings, LLC, a Delaware limited liability company and wholly-owned 
subsidiary of The Dow Chemical Company, which owns a 15% limited 
partnership interest in Freeport LNG; and (4) Turbo LNG, LLC, a 
Delaware limited liability company and wholly-owned subsidiary of Osaka 
Gas Co., Ltd., which owns a 10% limited partnership interest in 
Freeport LNG.
    On June 18, 2004, the Federal Energy Regulatory Commission (FERC) 
authorized Freeport LNG to site, construct and operate the Freeport LNG 
terminal on Quintana Island, southeast of the City of Freeport in 
Brazoria County, Texas. The facilities, completed in June 2008, include 
an LNG ship marine terminal and unloading dock, LNG transfer lines and 
storage tanks, high-pressure vaporizers, and a 9.6-mile long send-out 
pipeline extending to the Stratton Ridge meter station.\1\ On July 1, 
2008, FERC issued a letter Order granting Freeport LNG's request to 
commence service at its Quintana Island import terminal.
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    \1\ See Freeport LNG Development, L.P., 107 FERC ] 61,278, 
(2004), order granting rehearing and clarification, 108 FERC 
 61,253 (2004), order amending Section 3 authorization, 112 
FERC ] 61,194 (2005), order issuing authorization, 116 FERC ] 61,290 
(2006).
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    On January 15, 2008, DOE/FE granted Freeport LNG blanket 
authorization to import up to 30 Bcf of LNG from various international 
sources for a two-year term beginning March 1, 2008.\2\ On December 15, 
2009, DOE/FE granted Freeport LNG blanket authorization to import LNG 
for a second two-year term beginning March 1, 2010.\3\
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    \2\ Freeport LNG Development, L.P., DOE/FE Order No. 2457, 
issued January 15, 2008.
    \3\ Freeport LNG Development, L.P., DOE/FE Order No. 2737, 
issued December 15, 2009.
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    On May 6, 2009, FERC authorized certain equipment modifications at 
the Freeport LNG terminal as required to enable the loading and export 
of foreign-source LNG.\4\
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    \4\ Freeport LNG Development, L.P., 127 FERC ] 61,105 (2009).
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    On May 28, 2009, in DOE/FE Order No. 2644 (Order 2644), DOE/FE 
granted Freeport LNG blanket authorization to export, on its own behalf 
or as agent for others, up to a total of the equivalent of 24 Bcf of 
foreign-source LNG from the Freeport LNG terminal over a two-year 
period to customers in the United Kingdom, Belgium, Spain, France, 
Italy, Japan, South Korea, India, China and/or Taiwan.\5\ This blanket 
authorization was later amended to permit exports to Canada, Mexico and 
any other country with the capacity to import LNG via ocean-going 
carrier and with which trade is not prohibited by U.S. law or 
policy.\6\
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    \5\ Freeport LNG Development, L.P., DOE/FE Order No. 2644, 
issued May 28, 2009.
    \6\ Freeport LNG Development, L.P., DOE/FE Order Nos. 2644-A and 
2644-B, issued September 22, 2009 and May 11, 2010, respectively.
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Current Application

    In the instant application, Freeport LNG is seeking blanket 
authorization to export LNG that previously had been imported from 
foreign sources, to which it holds title, as well as previously 
imported LNG that it may export as agent on behalf of other entities 
who themselves hold title, on a short-term or spot market basis from 
the existing Freeport LNG terminal on Quintana Island, Texas. Freeport 
LNG states that the current application is filed in anticipation of the 
expiration of the blanket export authorization granted in Order No. 
2644. Freeport LNG is requesting to export an amount up to the 
equivalent of 24 Bcf of natural gas to any country which has the 
capacity to import LNG via ocean-going carrier, and with which trade is 
not prohibited by U.S. law or policy. Freeport LNG seeks to export the 
LNG over a two year period commencing on the date of the authorization

Public Interest Considerations

    In support of its application, Freeport LNG asserts the proposed 
authorization is in the public interest. Under section 3 of the Natural 
Gas Act, as amended, an LNG export from the United States to a foreign 
country must be authorized unless ``the proposed exportation will not 
be consistent with the public interest.'' Section 3 thus creates a 
statutory presumption in favor of approval of this application, and 
parties opposing the authorization bear the burden of overcoming this 
presumption.
    Freeport LNG states that there is no domestic reliance on the LNG 
that it seeks to export. Freeport LNG states that DOE/FE, in Order 
2644, authorized the export of previously imported foreign-sourced LNG. 
DOE/FE determined that there was no domestic reliance on the volumes of 
imported LNG that Freeport sought to export. Freeport LNG states that 
DOE/FE has recently issued LNG blanket export authorizations to other 
applicants, in each case finding that existing domestic supplies are 
sufficient to serve U.S. markets without reliance on imported LNG 
supplies. Freeport LNG states that DOE/FE made the same finding in 
Order No. 2859, which granted the Dow Chemical Company blanket 
authorization to export up to an amount equivalent to 390 Bcf of 
previously imported LNG from the Freeport LNG terminal. In that Order, 
DOE/FE found that ``the LNG which Dow seeks to export in this case is 
not needed in order to meet domestic market demand for natural gas on a 
competitively priced basis and that the exports of LNG authorized by 
this amendment will have no significant impact on the market's ability 
to meet the demand for natural gas domestically.'' \7\
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    \7\ The Dow Chemical Company, DOE/FE Order No. 2859, issued 
October 5, 2010.
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    Additionally, Freeport LNG states that traditional domestic natural 
gas production has been supplemented by unconventional sources, such as 
shale gas formations, which new technologies have made economically 
recoverable. Freeport LNG asserts that as a result of this increased 
domestic supply, domestic gas prices have remained low compared to 
other global markets, such as in Europe and Asia, discouraging imports 
to the U.S. Freeport LNG states that the imported LNG that Freeport LNG 
seeks to export will be surplus to the demands of U.S. markets during 
the period of requested authorization, and is needed primarily to 
enable Freeport LNG to economically maintain and operate its Freeport 
LNG terminal on Quintana Island. In the event that market conditions 
would support delivery of Freeport LNG's imported supplies to U.S. 
markets, the requested authorization would also serve to increase LNG 
supplies available for delivery to U.S. markets if those markets 
support it.
    Freeport LNG also states in its application that local natural gas 
supplies will not be reduced. The applicant states that it intends to 
export only foreign sourced LNG, and does not intend to export 
domestically produced natural gas. Further, the applicant states that 
U.S. natural gas supplies would actually increase if the requested 
authorization were granted, since the boil-off gas from any LNG cargoes 
delivered to the Freeport LNG terminal would be sold into U.S. markets. 
Freeport LNG asserts that granting the requested authorization would 
encourage it to obtain and store spot-market LNG cargoes, making it 
available to supply local markets when conditions support it, thereby 
serving to moderate U.S. natural gas price volatility. Freeport LNG 
asserts that in light of these conditions, its request to export 
previously imported foreign-

[[Page 33748]]

sourced LNG is consistent with the public interest.

Environmental Impact

    Freeport LNG states that no change to the Freeport LNG terminal on 
Quintana Island would be required for the proposed export of foreign-
source LNG. Thus, according to Freeport, approval of this application 
would not constitute a Federal action significantly affecting the human 
environment within the meaning of the National Environmental Policy Act 
(NEPA), 42 U.S.C. 4321 et seq. NEPA requires DOE to give appropriate 
consideration to the environmental effects of its proposed decisions. 
No final decision will be issued in this proceeding until DOE has met 
its NEPA responsibilities.

DOE/FE Evaluation

    This export application will be reviewed pursuant to section 3 of 
the Natural Gas Act, as amended, and the authority contained in DOE 
Delegation Order No. 00-002.00L (Apr. 29, 2011) and DOE Redelegation 
Order No. 00-002.04E (Apr. 29, 2011). In reviewing this LNG export 
application, DOE will consider domestic need for the gas, as well as 
any other issues determined to be appropriate, including whether the 
arrangement is consistent with DOE's policy of promoting competition in 
the marketplace by allowing commercial parties to freely negotiate 
their own trade arrangements. Parties that may oppose this application 
should comment in their responses on these issues.

Public Comment Procedures

    In response to this notice, any person may file a protest, 
comments, or a motion to intervene or notice of intervention, as 
applicable. Any person wishing to become a party to the proceeding must 
file a motion to intervene or notice of intervention, as applicable. 
The filing of comments or a protest with respect to the application 
will not serve to make the commenter or protestant a party to the 
proceeding, although protests and comments received from persons who 
are not parties will be considered in determining the appropriate 
action to be taken on the application. All protests, comments, motions 
to intervene or notices of intervention must meet the requirements 
specified by the regulations in 10 CFR part 590.
    Filings may be submitted using one of the following methods: (1) E-
mailing the filing to [email protected], with FE Docket No. 11-51-LNG 
in the title line; (2) mailing an original and three paper copies of 
the filing to the Office of Natural Gas Regulatory Activities at the 
address listed in ADDRESSES; (3) hand delivering an original and three 
paper copies of the filing to the Office of Natural Gas Regulatory 
Activities at the address listed in ADDRESSES; or (4) submitting 
comments in electronic form on the Federal eRulemaking Portal at http://www.regulations.gov, by following the on-line instructions and 
submitting such comments under FE Docket No. 11-51LNG. DOE/FE suggests 
that electronic filers carefully review information provided in their 
submissions and include only information that is intended to be 
publicly disclosed.
    A decisional record on the application will be developed through 
responses to this notice by parties, including the parties' written 
comments and replies thereto. Additional procedures will be used as 
necessary to achieve a complete understanding of the facts and issues. 
A party seeking intervention may request that additional procedures be 
provided, such as additional written comments, an oral presentation, a 
conference, or trial-type hearing. Any request to file additional 
written comments should explain why they are necessary. Any request for 
an oral presentation should identify the substantial question of fact, 
law, or policy at issue, show that it is material and relevant to a 
decision in the proceeding, and demonstrate why an oral presentation is 
needed. Any request for a conference should demonstrate why the 
conference would materially advance the proceeding. Any request for a 
trial-type hearing must show that there are factual issues genuinely in 
dispute that are relevant and material to a decision and that a trial-
type hearing is necessary for a full and true disclosure of the facts.
    If an additional procedure is scheduled, notice will be provided to 
all parties. If no party requests additional procedures, a final 
Opinion and Order may be issued based on the official record, including 
the application and responses filed by parties pursuant to this notice, 
in accordance with 10 CFR 590.316.
    The application filed by Freeport LNG is available for inspection 
and copying in the Office of Natural Gas Regulatory Activities docket 
room, Room 3E-042, 1000 Independence Avenue, SW., Washington, DC 20585. 
The docket room is open between the hours of 8 a.m. and 4:30 p.m., 
Monday through Friday, except Federal holidays. The application and any 
filed comments, protests, motions to intervene or notice of 
interventions, will also be available electronically by going to the 
following DOE/FE Web address: http://www.fe.doe.gov/programs/gasregulation/index.html. In addition, any electronic comments filed in 
electronic form on the Federal eRulemaking Portal will also be 
available at: http://www.regulations.gov.

    Issued in Washington, DC on June 2, 2011.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2011-14280 Filed 6-8-11; 8:45 am]
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