[Federal Register Volume 78, Number 39 (Wednesday, February 27, 2013)]
[Notices]
[Pages 13330-13333]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04540]


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DEPARTMENT OF ENERGY

[FE Docket No. 12-184-LNG]


Pangea LNG (North America) Holdings, LLC; Application for Long-
Term Authorization To Export Liquefied Natural Gas Produced From 
Domestic Natural Gas Resources to Non-Free Trade Agreement Countries 
for a 25-Year Period

AGENCY: Office of Fossil Energy, DOE.

ACTION: Notice of application.

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[[Page 13331]]

SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice of receipt of an application (Application) filed on 
December 19, 2012, by Pangea LNG (North America) Holdings, LLC 
(Pangea), requesting long-term, multi-contract authorization to export 
domestically produced liquefied natural gas (LNG) in an amount up to 
the equivalent of 398.5 billion cubic feet (Bcf) per year (Bcf/y) of 
natural gas (equal to 1.09 Bcf/day of natural gas), the equivalent of 8 
million metric tons per annum (mtpa), from its proposed South Texas LNG 
Export Project (ST LNG Project) located at the Port of Corpus Christi 
in Ingleside, Texas. Pangea requests this authorization for a 25-year 
term commencing on the earlier of the date of first export or seven 
years from the date the requested authorization is granted. The LNG 
would be exported 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) that 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. Pangea 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, April 29, 
2013.

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 Avenue SW., Washington, DC 20585, (202) 
586-3397.

SUPPLEMENTARY INFORMATION:

Background

    Pangea is a Delaware limited liability company with its principal 
place of business in The Woodlands, Texas. Pangea is a wholly owned 
subsidiary of Pangea LNG B.V. (Pangea LNG), a Netherlands-based company 
that is developing floating LNG liquefaction and storage solutions 
around the globe. Pangea LNG's ordinary shares are owned by Daewoo 
Shipbuilding & Marine Engineering Co., Ltd. (DSME) (70%), D&H Solutions 
AS (20%), and NextDecade International Co[ouml]peratief U.A. 
(NextDecade International) (10%).
    DSME is a South Korea-based company whose major shareholders 
consist of Korea Development Bank (31.27%) and Korea Asset Management 
Corporation (19.11%), with the remaining shares being widely-held (with 
no individual entities holding five (5) percent or more of DSME's 
shares).\1\ D&H Solutions AS is a Norwegian-based joint venture company 
that is owned by Hemla II AS (50%) and DSME (50%). NextDecade 
International is a Netherlands-based cooperative and has six (6) 
individual investors from the United States, Spain, and The 
Netherlands.
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    \1\ Pangea LNG states that Treasury shares comprise 1.2% of the 
total shares of DSME.
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    Pangea states that consistent with an executed Letter of Intent, it 
is working with Statoil North America, Inc. on the development of the 
ST LNG Project. Statoil North America, Inc. is a subsidiary of Statoil 
ASA (Statoil), a Norwegian upstream oil and gas company listed on the 
Oslo and New York stock exchanges. Pangea states that headquartered in 
Stavanger, Norway, Statoil is an international energy company with 40 
years of offshore oil and gas production experience on the Norwegian 
Continental Shelf and currently has operations in 36 countries. Pangea 
states that Statoil's LNG activities include being the operator of the 
Sn[oslash]hvit, and LNG export facility in Norway; exercising its 
capacity holder rights with respect to the Cove Point import and 
regasification terminal (in the U.S.); and producing, transporting and 
marketing LNG worldwide. Pangea states that Statoil has been active in 
the U.S. oil and gas industry for 25 years. Pangea states that over the 
past decade, Statoil has increased its North American business 
substantially through upstream positions in the Gulf of Mexico, 
acreages in the Marcellus shale gas play, the Eagle Ford shale gas 
play, the Bakken shale oil play and oil sands acreages in Alberta, 
Canada. Pangea further states that it and Statoil are in active 
negotiations with respect to Statoil procuring up to a 50% equity stake 
in the ST LNG Project and utilizing up to 50% of the liquefaction and 
export capacity of the ST LNG Project.\2\
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    \2\ Should a change in control occur prior to DOE/FE's issuance 
of an order in this proceeding, Pangea will file a supplement to the 
instant Application to update the relevant applicant information. 
Pangea acknowledges that in any order granting the authorization 
requested in the Application, DOE/FE may require that Pangea request 
approval from the Assistant Secretary for Fossil Energy prior to a 
change in control of the authorization holder, whether by asset 
sale, stock transfer or other means.
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Current Application

    In the instant Application, Pangea seeks long-term, multi-contract 
authorization to export domestically produced LNG in an amount up to 
the equivalent of 398.5 billion cubic feet (Bcf) per year (Bcf/y) of 
natural gas (equal to 1.09 Bcf/day of natural gas), the equivalent of 8 
million metric tons per annum (mtpa), for a period of 25 years 
beginning on the earlier of the date of first export or seven years 
from the date the authorization is granted by DOE/FE. Pangea seeks to 
export this LNG to any nation with which the United States does not 
have an FTA requiring national treatment for trade in natural gas or 
LNG with which trade is not prohibited by United States law or policy. 
Pangea is seeking this export authorization in conjunction with its 
proposal to construct, own, and operate the ST LNG Project.\3\ Pangea 
states that the ST LNG Project will consist of both land-based and 
floating components and will include natural gas treatment, 
compression, liquefaction and storage

[[Page 13332]]

facilities, as well as ancillary facilities required to receive and 
liquefy natural gas, and to store and deliver LNG. Pangea states that 
the ST LNG Project will be capable of processing an average of 
approximately 398.5 Bcf/y, approximately 1.09 Bcf/d, of pipeline-
quality natural gas. Pangea states that such gas will be delivered to 
the ST LNG Project through an approximately 27-mile-long pipeline, 
South Texas Pipeline, to be developed by a Pangea affiliate. Pangea 
intends to interconnect the ST LNG Project with nine interstate and 
intrastate pipeline systems \4\ via the South Texas Pipeline, thereby 
allowing natural gas to be supplied through displacement or direct 
access from a wide variety of supply sources.
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    \3\ Pangea states: (i) Regulatory approval also must be obtained 
from the Federal Energy Regulatory Commission (FERC) under Section 3 
of the NGA for the siting, construction, and operation of the ST LNG 
Project and under Section 7 of the NGA for the siting, construction, 
and operation of an affiliated natural gas pipeline that will bring 
feed gas and fuel gas to the ST LNG Project; (ii) Pangea will 
initiate the process to obtain such authorizations in Spring 2013 by 
requesting authorization from the Director of the Office of Energy 
Projects to commence the FERC's mandatory National Environmental 
Policy Act pre-filing review process for the ST LNG Project and 
associated pipeline; (iii) the potential environmental impacts of 
the ST LNG Project, as well as the affiliated pipeline, will be 
reviewed by FERC in conjunction with that proceeding.
    \4\ Pangea states these nine pipelines are: Texas Eastern 
Transmission Corporation, Kinder Morgan Tejas Pipeline, LLC, Natural 
Gas Pipeline Company of America, Transcontinental Gas Pipeline 
Corporation, Tennessee Gas Pipeline Company, Gulf South Pipeline 
Company, LP, Crosstex Energy, L.P., GulfTerra Texas Pipeline, LP, 
and Channel Industries Gas Company. Their total estimated combined 
throughput is approximately 4.4 Bcf/d. The South Texas Pipeline's 
actual interconnects and delivery/receipt points ultimately will be 
determined in accordance with the needs of the users of the South 
Texas Pipeline. Significantly, there are various other natural gas 
pipelines crossed by, or in proximity to, the South Texas Pipeline's 
proposed route that may provide additional transportation options if 
needed.
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Public Interest Considerations

    Pangea states that the ST LNG Project has been proposed, in part, 
due to the markedly improved outlook for domestic natural gas reserves 
and production. Pangea states that improved drilling techniques and 
extraction technologies have contributed to the rapid growth in new 
supplies from unconventional gas-bearing formations across the U.S. and 
have been utilized to enhance production in some conventional fields. 
Pangea states that such developments have completely changed the 
complexion of the U.S. natural gas industry and radically expanded the 
resource base.
    Pangea states that LNG exports via the ST LNG Project represents a 
market-driven path toward deploying the country's vast energy reserves 
in a manner that will meaningfully contribute to the public interest 
through a variety of benefits, including: (1) More jobs \5\ and 
personal income, greater tax revenues, and increased economic activity; 
(2) Improved U.S. balance of payments (by between $3.7 billion and $6 
billion annually) through the exportation of natural gas and the 
displacement of imports of other petroleum liquids; (3) Enhanced 
national security, as a result of the U.S.'s larger role in 
international energy markets, assistance provided to our allies, and 
reduced U.S. dependency on foreign oil and natural gas production; \6\ 
(4) Better opportunities to market U.S. products and services abroad, 
as a result of new competitively priced gas supplies introduced into 
world markets leading to improved economies among the U.S.'s trading 
partners; (5) Increased economic trade and closer ties with foreign 
trading partners and hemispheric allies, while displacing 
environmentally damaging fuels in those countries; (6) Increased 
production capacity able to better adjust to varying domestic demand 
scenarios; and (7) Dampened volatility in domestic natural gas prices.
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    \5\ As discussed in the Perryman Report supporting this 
Application, Pangea asserts that the ST LNG Project will spur 
substantial job creation. The statement found at page 2 of the NERA 
Report (``LNG exports are not likely to affect the overall level of 
employment in the U.S.'') should not be read to contradict this. 
http://www.fe.doe.gov/programs/gasregulation/reports/nera_lng_report.pdf. NERA had as a base assumption ``full employment'' within 
the U.S. economy. NERA Report at 103. Therefore, NERA could only use 
its model to assess shifts in employment, which were found to be 
within industry norms. Id. at 2.
    \6\ John Deutch, The U.S. Natural-Gas Boom Will Transform the 
World, Wall Street Journal (August 14, 2012), http://online.wsj.com/article/SB10001424052702303343404577514622469426012.html.
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    Pangea submits that these benefits, and others discussed in this 
Application, demonstrate that Pangea's export proposal is not 
inconsistent with the public interest. Pangea states that this stance 
is now buttressed by the independent NERA Report, which key findings 
related to the macroeconomic impacts of LNG exports are overwhelmingly 
positive.
    Further discussion of the public interest and analysis of the 
impact of LNG exports is included in the Application and Appendix A of 
the Application.

Environmental Impact

    Pangea states that it will request NGA Section 3 authorization from 
FERC so that it may site, construct, and operate the ST LNG Project. 
Pangea states that it intends to commence the FERC's mandatory pre-
filing process in Spring 2013 and then file its final application to 
obtain Section 3 authorization in the Fall 2013. Pangea states that its 
affiliate developing the ST Pipeline will file an application for NGA 
Section 7(c) authorization to construct, own, and operate the South 
Texas Pipeline.
    Pangea states that the potential environmental impacts of the ST 
LNG Project will be reviewed by FERC under the National Environmental 
Policy Act (NEPA). Pangea further states that consistent with the NEPA 
scheme applicable to applications for authorizations under NGA Section 
3 delineated by Congress in the Energy Policy Act of 2005,\7\ it 
expects that FERC shall act as the lead agency, with DOE/FE acting as a 
cooperating agency, in connection with the ST LNG Project.
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    \7\ Public Law 109-58, 119 Stat. 594.
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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

[[Page 13333]]

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 Docket No. 12-184-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. 12-184-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. 12-184-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 Pangea 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 February 21, 2013.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2013-04540 Filed 2-26-13; 8:45 am]
BILLING CODE 6450-01-P