[Federal Register Volume 77, Number 201 (Wednesday, October 17, 2012)]
[Notices]
[Pages 63806-63809]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25536]


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DEPARTMENT OF ENERGY

[FE Docket No. 12-100-LNG]


Southern LNG Company, L.L.C.; Application for Long-Term 
Authorization To Export Liquefied Natural Gas Produced From Domestic 
Natural Gas Resources to Non-Free Trade Agreement Countries for a 20-
Year Period

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 (Application) filed on 
August 31, 2012, by Southern LNG Company, L.L.C. (Southern LNG), 
requesting long-term, multi-contract authorization to export up to 4 
million tons per annum (mtpa) of liquefied natural gas (LNG), the

[[Page 63807]]

equivalent of 182.5 billion cubic feet (Bcf) of natural gas per year or 
0.5 Bcf per day (Bcf/d), over a 20-year period, commencing on the 
earlier of the date of first export or ten years from the date the 
requested authorization is granted. The LNG would be exported from the 
LNG terminal in Chatham County, Georgia, near the City of Savannah 
(Elba Island Terminal) to any country (1) with which the United States 
does not have a free trade agreement (FTA) requiring national treatment 
for trade in natural gas, (2) which has developed or in the future 
develops the capacity to import LNG via ocean-going carrier, and (3) 
with which trade is not prohibited by U.S. law or policy. The source of 
the LNG will be from direct connects with the interstate pipelines of 
Southern Natural Gas Company, L.L.C., Elba Express Company, L.L.C., 
Carolina Gas Transmission Corporation, and the indirect connects with 
interstate pipelines of Transcontinental Gas Pipe Line Company, LLC and 
Florida Gas Transmission, LLC. Southern LNG is requesting this 
authorization to export LNG both on its own behalf and as agent for 
other parties who hold title to the LNG at the point of export. The 
Application was 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 no later than 4:30 p.m., eastern time, December 17, 
2012.

ADDRESSES: 

Electronic Filing by email:
    [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 Marc Talbert, 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, (202) 586-9478; (202) 586-7991.
Edward Myers, U.S. Department of Energy, Office of the Assistant 
General Counsel for Electricity and Fossil Energy, Forrestal Building, 
Room 6B-256, 1000 Independence Ave. SW., Washington, DC 20585, (202) 
586-3397.

SUPPLEMENTARY INFORMATION:

Background

    Southern LNG is a Delaware limited liability company with its 
principal place of business in Birmingham, Alabama. Southern LNG is a 
wholly owned subsidiary of El Paso Pipeline Partners Operating Company, 
L.L.C. (EPPPOC). EPPPOC is a wholly owned subsidiary of El Paso 
Pipeline Partners, L.P. (EPPP). Kinder Morgan, Inc. owns the general 
partner interest in EPPP.
    Southern LNG states that the Export Project (EP) will include 
natural gas processing and liquefaction facilities to receive, liquefy 
and export domestic natural gas at the Elba Island Terminal. The EP 
facilities will be integrated into the existing terminal facilities. 
Southern LNG states that the Elba Island Terminal includes (1) berthing 
and accommodations for two LNG vessels and unloading facilities and 
piping and appurtenances; (2) and LNG storage and vaporization facility 
(including five storage tanks capable of storing a total of 
approximately 550,000 cubic meters of LNG), vaporization units and 
associated piping and control equipment; (3) associated utilities, 
infrastructure, and support systems.
    Southern LNG states that the EP facilities would permit gas to be 
(1) received by pipeline at the Elba Island Terminal, with these 
pipelines having indirect access to the nationally integrated 
interstate pipeline grid, (2) liquefied, and (3) loaded from the 
terminal's storage tanks onto vessels berthed at the existing marine 
facility. Southern LNG further states that the EP will be designed to 
allow Southern LNG to be capable of providing bi-directional service. 
Thus, once the EP facilities are operational, the Elba Island Terminal 
will have the capability to (1) liquefy domestic gas for export or (2) 
import LNG for delivery to domestic markets. Southern LNG states that 
it does not expect the EP to result in vessel traffic to or from the 
facility in excess of that currently authorized for the existing import 
facility.
    Southern LNG states that the new facilities proposed would be 
subject to review and approval by the Federal Energy Regulatory 
Commission (FERC). Southern LNG states that upon completion of initial 
facility planning and design, it will request that the FERC initiate 
the mandatory pre-filing review process for the EP. Southern LNG 
further states that this request will be made before the end of 2012.

Current Application

    In the instant application, Southern LNG seeks long-term, multi-
contract authorization to export up to 4 mtpa of domestically produced 
natural gas, as LNG (the equivalent of 182.5 Bcf per year, or 0.5 Bcf/d 
of natural gas), for a period of 20 years beginning on the earlier of 
the date of first export or ten years from the date the authorization 
is granted by DOE/FE. Southern LNG requests that such long-term 
authorization provide for export from its Elba Island terminal to any 
country with which the United States does not have an FTA requiring 
national treatment for trade in natural gas, which has developed or in 
the future develops the capacity to import LNG via ocean-going carrier, 
and with which trade is not prohibited by U.S. law or policy.
    Southern LNG requests authorization to export LNG acting on its own 
behalf or as agent for others. Southern LNG states that to ensure that 
all exports are permitted and lawful under U.S. laws and policies, it 
will comply with all DOE requirements for an exporter or agent. 
Southern LNG states that in DOE/FE Order No. 2913,\1\ the DOE approved 
a proposal to register each LNG title holder for whom the applicant 
sought to export LNG as agent. The applicant also proposed that this 
registration include a written statement by the tile holder 
acknowledging and agreeing to comply with all applicable requirements 
included in its export authorization and to include those requirements 
in any subsequent purchase or sale agreement entered into by that title 
holder. The applicant further stated that it would file under seal with 
the DOE any relevant long-term commercial agreements that it reached 
with the LNG title holders on whose behalf the exports were performed.
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    \1\ Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC, FE 
Docket No. 10-160-LNG, Order No. 2913 (February 10, 2011).
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    Southern LNG states that therefore, when acting as agent, it will 
register with the DOE each LNG title holder for whom it seeks to export 
as agent, and will provide the DOE with a written statement by the 
title holder acknowledging and agreeing to (1) comply with all 
requirements in its long-term export authorization, and (2) include 
those requirements in any subsequent purchase or sale agreement entered 
into by the title holder.

[[Page 63808]]

Southern LNG will also file under seal with the DOE any relevant long-
term commercial agreements it enters into with the LNG title holders on 
whose behalf the exports are performed.

Public Interest Considerations

    Southern LNG states that DOE/FE's primary consideration is whether 
the exports will be transacted on a market-driven, competitive basis. 
Southern LNG states that this is the case here: The owners of gas or 
the holders of capacity at the EP facilities will make decisions 
whether to export gas based on then prevailing market conditions in the 
domestic market and the destination markets. Southern LNG states that 
with export capability at the Elba Island Terminal, both exports and 
imports will be subject to the ultimate market test: Those with 
capacity at the terminal will decide whether the market warrants 
imports of LNG, exports of LNG or neither. Southern LNG states that 
while its transactions will be competitive, market-based transactions 
consistent with DOE/FE's public interest policy, it is aware of the 
ongoing debate over whether LNG exports will cause price increases in 
the domestic market that run counter to the public interest. In order 
to address such concerns, Southern LNG commissioned Navigant 
Consulting, Inc. (Navigant) to undertake a study of the potential 
impact to domestic supply and prices that might result from LNG 
exports. The Navigant Market Analysis Study, attached to the 
Application as Appendix A, considered the possible impacts that the EP 
might have on natural gas supply and pricing. Navigant's analysis also 
assumed the existence of additional LNG exports from other projects as 
well as an aggressive increase in natural gas demand due to the use of 
natural gas in transportation vehicles. Even in the High Demand Base 
Case, which assumes 7.2 Bcf/d of LNG exports in addition to Southern 
LNG's requested 0.5 Bcf/d and makes aggressive assumptions about 
natural gas vehicle demand, the impact on domestic prices over the term 
of the requested authorization is minimal.
    Southern LNG states that Navigant concludes that LNG exports will 
actually encourage a more reliable and stable domestic natural gas 
market with less volatility, which will benefit all market 
participants. By providing an additional outlet for supply, LNG exports 
will help to level the peaks and valleys historically common to the 
natural gas industry. Southern LNG states that in other words, LNG 
exports will reduce the price volatility that can lead producers to 
curtail production and reduce investment when prices are declining, 
which, in turn, leads to prices to subsequently spike when production 
falls too low. Southern LNG also states that its EP will not rely on 
any particular source of gas, but rather, through the nationally 
integrated gas pipeline grid, and will be able to access gas supplies 
from a variety of producing basins within the U.S.
    Southern LNG states that while contributing to the economic 
vibrancy of the Southeast region, another benefit of its EP is that, 
once constructed and in operation, the export facilities will be 
located within the footprint of the existing Elba Island Terminal and 
new LNG storage facilities do not have to be constructed in order for 
Southern LNG to provide the export service. Therefore, the EP's 
environmental impacts will be relatively small.
    Further details can be found in the Application, which has been 
posted at http://www.fe.doe.gov/programs/gasregulation/index.html.

Environmental Impact

    Southern LNG states that the EP will have minimal environmental 
impacts given that, following construction, the export facilities will 
be located within the previously authorized footprint of the existing 
Elba Island Terminal.\2\ The FERC conducted an environmental review of 
the Elba Island Terminal site in connection with authorization of the 
siting, construction, and operation of the Terminal in Docket Nos. 
CP99-579-000, CP02-379-000, and CP06-470-000. Southern LNG states that 
the facilities associated with the EP will only require upgrades or 
additions to the existing infrastructure at the Elba Island Terminal. 
Southern LNG also states that any additional environmental impacts 
associated with construction and operation of the EP will be reviewed 
by the FERC and the applicable state and federal permitting agencies 
(e.g., United States Army Corps of Engineers, Georgia Department of 
Natural Resources, and Coast Guard, among others) as part of the 
permitting process for the EP. Consistent with its practice regarding 
other applications, DOE/FE will be a cooperating agency in the FERC's 
environmental review.\3\ Southern LNG further states that it will keep 
DOE/FE apprised of the progress of the environmental review conducted 
by the FERC.
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    \2\ See, e.g., Sabine Pass Liquefaction, LLC, et al, 139 FERC ] 
61,039, at P 29 (2012).
    \3\ DOE/FE Order No. 2961-A, at 27.
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DOE/FE Evaluation

    The Application will be reviewed pursuant to section 3 of the NGA, 
as amended, and the authority contained in DOE Delegation Order No. 00-
002.00L (April 29, 2011) and DOE Redelegation Order No. 00-002.04E 
(April 29, 2011). In reviewing this LNG export Application, DOE will 
consider any issues required by law or policy. To the extent determined 
to be relevant or appropriate, these issues will include the impact of 
LNG exports associated with this Application, and the cumulative impact 
of any other application(s) previously approved, on domestic need for 
the gas proposed for export, adequacy of domestic natural gas supply, 
U.S. energy security, and any other issues, including the impact on the 
U.S. economy (GDP), consumers, and industry, job creation, U.S. balance 
of trade, international considerations, and 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, as well as any other issues 
deemed relevant to the Application.
    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 environmental 
responsibilities.
    Due to the complexity of the issues raised by the Applicants, 
interested persons will be provided 60 days from the date of 
publication of this Notice in which to submit comments, protests, 
motions to intervene, notices of intervention, or motions for 
additional procedures.

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) 
emailing the filing to [email protected] with FE

[[Page 63809]]

Docket No. 12-100-LNG in the title line; (2) mailing an original and 
three paper copies of the filing to the Office Natural Gas Regulatory 
Activities at the address listed in ADDRESSES. The filing must include 
a reference to FE Docket No. 12-100-LNG; or (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. The 
filing must include a reference to FE Docket No. 12-100-LNG.
    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 Oregon 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 8:00 a.m. and 4:30 p.m., 
Monday through Friday, except Federal holidays. The Application and any 
filed protests, motions to intervene or notice of interventions, and 
comments will also be available electronically by going to the 
following DOE/FE Web address: http://www.fe.doe.gov/programs/gasregulation/index.html.

    Issued in Washington, DC, on October 11, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-25536 Filed 10-16-12; 8:45 am]
BILLING CODE 6450-01-P