[Federal Register Volume 78, Number 143 (Thursday, July 25, 2013)]
[Notices]
[Pages 44934-44937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-17886]


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DEPARTMENT OF ENERGY

[FE Docket No. 13-42-LNG]


Sabine Pass Liquefaction, 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 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 
April 2, 2013, by Sabine Pass Liquefaction, LLC (SPL), requesting long-
term authorization to export liquefied natural gas (LNG) produced from 
domestic sources in an amount up to 91,250,000 million British thermal 
units ((MMBtu) per year (the equivalent of 88.3 billion standard cubic 
feet (Bcf) of natural gas per year), pursuant to the LNG Sale and 
Purchase Agreement (FOB) between SPL as seller and Centrica plc 
(CENTRICA) as buyer dated March 22, 2013 (CENTRICA SPA). SPL seeks 
authorization to export LNG from the Sabine Pass LNG Terminal in 
Cameron Parish, Louisiana, both to: (i) Any nation that currently has 
or in the future develops the capacity to import LNG and with which the 
United States currently has, or in the future enters into, a free trade 
agreement (FTA) requiring national treatment for trade in natural gas 
and LNG; and (ii) all countries that have not entered into an FTA with 
the United States requiring national treatment for trade in natural 
gas, which currently have or in the future develop the capacity to 
import LNG, and with which trade in not prohibited by U.S. law or 
policy. In the portion of SPL's Application subject to this Notice, SPL 
requests authorization to export LNG to any country with which the 
United States does not have an FTA requiring national treatment for 
trade in natural gas (non-FTA countries) with which trade is not 
prohibited by U.S. law or policy. SPL requests that this authorization 
commence on the earlier of the date of first export or eight years from 
the date the authorization is granted. The Application was filed under 
section 3 of the Natural Gas Act (NGA), 15 U.S.C. 717b.

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, September 23, 
2013.

ADDRESSES: Electronic Filing by email: [email protected].

Regular Mail

    U.S. Department of Energy (FE-34), Office of Oil and Gas Global 
Security and Supply, 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 Oil and Gas Global 
Security and Supply, Office of Fossil Energy, Forrestal Building, Room 
3E-042, 1000 Independence Avenue SW., Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: 
Larine Moore or Lisa Tracy, 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) 586-4523.
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

    SPL, a limited liability company with its principal place of 
business in Houston, Texas, is an indirect subsidiary of Cheniere 
Energy Partners, L.P. (Cheniere Partners), a limited partnership 
majority owned by Cheniere Energy, Inc. (Cheniere Energy). Cheniere 
Partners is a Delaware limited partnership with its primary place of 
business in Houston, Texas; Cheniere Energy is a Delaware corporation 
with its primary place of business in Houston, Texas. Cheniere Energy 
is a developer of LNG terminals and natural gas pipelines on the Gulf 
Coast,

[[Page 44935]]

including the Sabine Pass LNG Terminal. SPL is authorized to do 
business in the States of Texas and Louisiana.
    SPL and its affiliate, Sabine Pass LNG, L.P., are currently 
developing a liquefaction project consisting of four LNG production 
trains at the existing Sabine Pass LNG import, storage and vaporization 
terminal in Cameron, Parish, Louisiana (Liquefaction Project). On April 
16, 2012, the Federal Energy approved the construction and operation of 
the Liquefaction Project. On August 7, 2012, in Order No. 2961-A, DOE/
FE issued final authorization to SPL to export LNG from the Sabine Pass 
LNG Terminal to non-FTA Nations.\1\ On February 27, 2013, SPL filed 
with the Federal Energy Regulatory Commission (FERC) a request to 
initiate the Commission's pre-filing review \2\ for a proposed 
expansion of the Liquefaction Project that would consist of two 
additional liquefaction trains (Trains 5 and 6) totaling approximately 
1.3 Bcf per day of natural gas liquefaction capacity (Liquefaction 
Expansion Project).\3\
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    \1\ DOE/FE Order No. 2961, issued on May 20, 2011, granted 
conditional authorization to SPL to export domestically produced LNG 
from the Sabine Pass LNG Terminal to non-FTA nations.
    \2\ SPL received FERC approval to commence the mandatory 
National Environmental Policy Act (NEPA), 42 U.S.C. Sec.  4321, et 
seq., pre-filing review process for the planned Liquefaction 
Expansion Project on March 8, 2013, in Docket No. PF13-8-000. On 
June 7, 2013, the FERC published a Notice of Intent to Prepare an 
Environmental Assessment for SPL's planned expansion.
    \3\ SPL's pre-filing request also includes a request by an 
affiliated interstate pipeline company, Cheniere Creole Trail 
Pipeline, L.P. (CCTPL), for a proposed extension and expansion of 
the existing Cheniere Creole Trail Pipeline system in order to 
deliver feed-gas to the Liquefaction Expansion Project.
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    The parties to the CENTRICA SPA are SPL and CENTRICA. CENTRICA is a 
public limited company organized under the laws of England and Wales, 
with a primary place of business in Windsor, United Kingdom. SPL states 
that CENTRICA is a multi-national energy company with operations in 
seven countries, including the United States, involved in a wide range 
of activities, such as oil and gas exploration, electricity generation, 
natural gas distribution, and energy trading, among others.

Current Application

    SPL requests authorization to export up to 91,250,000 MMBtu per 
year of natural gas (approximately 88.3 Bcf per year) as LNG from the 
proposed fifth train at the Sabine Pass Liquefaction Project in Cameron 
Parish, Louisiana, to: (i) Any country with which the United States 
currently has, or in the future will have, a Free Trade Agreement (FTA) 
requiring the national treatment for trade in natural gas, and (ii) any 
country with which the United States does not have an FTA requiring 
national treatment for trade in natural gas (non-FTA countries) with 
which trade is not prohibited by U.S. law or policy. SPL seeks 
authorization to export the LNG for a 20-year term, commencing on the 
earlier of the date of first export or eight years from the date the 
authorization is issued.
    On July 12, 2013, in DOE/FE Order No. 3307, DOE granted the portion 
of SPL's current Application seeking export authorization to FTA 
nations.\4\ DOE/FE Order 3307, issued pursuant to pursuant to NGA 
section 3(c), 15 U.S.C. 717b(c), authorizes SPL to export domestically 
produced LNG by vessel pursuant to the long-term contract with Centrica 
plc from the Sabine Pass LNG Terminal. The portion of SPL's Application 
that seeks authorization to export domestically produced LNG to non-FTA 
countries will be reviewed pursuant to NGA section 3(a), 15 U.S.C. 
717b(a), and is the subject of this Notice.
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    \4\ Sabine Pass Liquefaction, LLC, DOE/FE Order No. 3307, Order 
Granting Authorization to Export Liquefied Natural Gas by Vessel 
Pursuant to the Long-Term Contract with Centrica plc from the Sabine 
Pass LNG Terminal to Free Trade Agreement Nations.
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    SPL states that the volume of natural gas to be exported and dates 
of commencement and completion for the proposed exports from the 
proposed fifth liquefaction train are set forth in the CENTRICA SPA. 
SPL further states that it will deliver to CENTRICA an annual contract 
quantity consisting of 91,250,000 MMBtu per year, which is equivalent 
to approximately 88.3 Bcf of natural gas per year. The price of LNG 
made available under the CENTRICA SPA consists of a two-part rate: the 
first part reimburses SPL for the capital and operating costs of the 
facilities that will be constructed; and the second part reimburses SPL 
for the cost of fuel and feed gas purchased to satisfy loading 
nominations under the contract. The CENTRICA SPA has a primary term of 
20 years from the date of first commercial delivery from the fifth LNG 
train, and may be extended for an additional ten year term upon 
election by CENTRICA. SPL states that the remaining terms and 
conditions of the CENTRICA SPA are substantially similar to other sales 
and purchase agreements in the industry.
    SPL states that it will purchase natural gas to be used as fuel and 
feedstock for LNG production from the interstate and intrastate grid at 
points of interconnection with other pipelines and with points of 
liquidity that are both upstream and downstream of the CCTPL system and 
other systems that interconnect with the Liquefaction Expansion 
Project. SPL anticipates that the Liquefaction Expansion Project will 
have access to various other interstate and intrastate pipeline systems 
that will enable SPL to purchase natural gas from multiple conventional 
and unconventional basins across the region and state, and throughout 
the U.S. SPL notes that this supply can be sourced in large volumes in 
the spot market, or else pursued under long-term arrangements. SPL 
notes that, to date, it has not entered into any natural gas purchase 
agreements for the purpose of supplying natural gas feedstock for the 
exports contemplated by the CENTRICA SPA.
    SPL requests that DOE/FE issue the FTA Authorization without 
modification or delay in accordance with the applicable standard of 
review under Section 3(c) of the NGA, and requests that DOE/FE issue 
the Non-FTA Authorization prior to March 31, 2014. SPL requests that 
the non-FTA Authorization be issued as a conditional order, pursuant to 
Section 590.402 of the DOE regulations, followed by issuance of a final 
order immediately upon completion of the environmental review of the 
Liquefaction Expansion Project by FERC.

Public Interest Considerations

    SPL states that its proposed non-FTA authorization should be 
granted by DOE/FE because it is not inconsistent with the public 
interest, as set forth in NGA section 3(a), and that there is ample 
evidence in the public record that exports of LNG, such as those 
requested by SPL in this Application, are in the public interest.
    SPL asserts that in granting SPL's request for export authorization 
in Orders No. 2961 and 2961-A, DOE/FE already has made a favorable 
public interest determination in the case of LNG exports from the 
Liquefaction Project. SPL contends that this previous determination 
made by DOE/FE is equally applicable here. SPL states that the 
determination in the earlier preceding was made on the basis of the 
very robust market studies and other evidence and comments that SPL 
submitted and that these items demonstrated the substantial economic 
and public benefits that are likely to follow from exports of natural 
gas as LNG. In particular, SPL points to the substantial record that it 
developed demonstrating the public interest benefits of exports in FE 
Docket No. 10-111-LNG.

[[Page 44936]]

    To further support the Application, SPL provides discussion of U.S. 
domestic production and consumption of natural gas, which, according to 
SPL, concludes that the sale of LNG to CENTRICA pursuant to the 
CENTRICA SPA is in the public interest and that such exports do not 
reduce the amount of natural gas available for domestic uses. 
Specifically, SPL provides further discussion with the following:
    (1) SPL states that the CENTRICA SPA was specifically constructed 
to respect the competitive natural gas market and to ensure that 
CENTRICA has the opportunity to respond to price signals as well. SPL 
further states that the export agreement functions in concert with the 
market, so that if additional gas supplies are required from 
participants that would otherwise consume gas, those supplies can be 
released to consumers that value it more. SPL further notes that 
because the CENTRICA SPA is constructed with a market mechanism that 
responds to the competitive natural gas market, it never results in 
consumption of gas that would otherwise be required by the market.
    (2) SPL states that it previously commissioned a report from 
Advanced Resources International (ARI), titled U.S. Natural Gas 
Resources and Productive Capacity: Mid-2012 (ARI Resource Report), to 
assess the scope of domestic natural gas resources and its potential 
for future recovery. SPL states that the ARI Resource Report 
demonstrates that the U.S. has significant natural gas resources 
available to meet projected future domestic needs, including the 
quantities contemplated for export under this Application. SPL further 
states that the ARI Resource Report establishes that the availability 
of new natural gas reserves is likely to continue expanding into the 
future as new unconventional formations are discovered and the oil and 
gas industry continues to improve drilling and extraction techniques.
    (3) SPL states that the Reference Case of EIA's Annual Energy 
Outlook 2013 Early Release (AEO 2013) supports the proposition that the 
domestic natural gas resource base continues to expand rapidly. SPL 
states that the AEO 2013 Reference Case forecasts that domestic dry 
natural gas production will increase by an average of 1.3% per year 
through 2040 and that U.S. dry natural gas production will total 33.14 
Tcf by 2040, an increase of 44% from production levels of 23.0 Tcf in 
2011. SPL further notes that the AEO 2013 Reference Case projects that 
domestic demand growth for natural gas will average 0.7% annually over 
the next 30 years, leading to a domestic market of 29.54 Tcf by 2040. 
SPL states that AEO 2013 projects that over this same period of time, 
domestic natural gas production is projected to grow by 1.3% per year 
on average, or approximately twice the rate of growth in domestic 
natural gas demand. SPL further states that the EIA anticipates that 
the U.S. will become a net exporter of natural gas after 2020.
    In summary, SPL states that the abundant U.S. natural gas supplies 
and the overwhelmingly positive economic benefits of the Liquefaction 
Project and associated LNG exports, coupled with the competitive 
pricing mechanism in the CENTRICA SPA, unequivocally establish that 
SPL's proposal satisfies the public interest standard as set forth in 
DOE's Policy Guidelines.\5\
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    \5\ Policy Guidelines and Delegation Orders Relating to the 
Regulation of Imported Natural Gas, 49 FR 6684 (Feb. 22, 1984).
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    Further details can be found in Appendix C of the Application, 
which has been posted at http://www.fossil.energy.gov/programs/gasregulation/authorizations/2013_applications/13_42_lng.pdf.

Environmental Impact

    SPL states that the potential environmental impact of the Sabine 
Pass Expansion Project will be reviewed by FERC as the lead agency for 
the purposes of coordinating all applicable federal authorizations and 
complying with NEPA. SPL anticipates that DOE/FE will participate as a 
cooperating agency in FERC's environmental review process for the 
Liquefaction Expansion Project. SPL maintains that DOE/FE has adopted 
regulations of the Council on Environmental Quality (CEQ) that govern 
its role as a cooperating agency in the NEPA process. DOE's regulations 
provide that DOE shall cooperate with the other agencies in developing 
environmental information. Finally, SPL states that CEQ's regulations 
further provide for DOE/FE to adopt FERC's findings so long as FERC has 
satisfactorily addressed any comments raised by DOE/FE in its role as a 
cooperating agency.

DOE/FE Evaluation

    The Application will be reviewed pursuant to section 3(a) of the 
NGA, 15 U.S.C. 717b(a), 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 on domestic need 
for the gas proposed for export, adequacy of domestic natural gas 
supply, U.S. energy security, and the cumulative impact of the 
requested authorization and any other LNG export application(s) 
previously approved on domestic natural gas supply and demand 
fundamentals. DOE will also consider any other relevant 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 address these issues in 
their comments and/or protests, 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 Applicant, 
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 Docket No. 13-42-LNG 
in the title line; (2) mailing an original and three paper copies of 
the filing to the Office Oil and Gas Global Security and Supply at the 
address listed in ADDRESSES; or (3) hand

[[Page 44937]]

delivering an original and three paper copies of the filing to the 
Office of Oil and Gas Global Security and Supply at the address listed 
in ADDRESSES before 4:30 p.m. EST. All filings must include a reference 
to FE Docket No. 13-42-LNG. Please note: If submitting a filing via 
email, please include all related documents and attachments (e.g., 
exhibits) in the original email correspondence. Please do not include 
any active hyperlinks or password protection in any of the documents or 
attachments related to the filing. All electronic filings submitted to 
DOE must follow these guidelines to ensure that all documents are filed 
in a timely manner. Any hardcopy filing submitted greater in length 
than 50 pages must also include, at the time of the filing, a digital 
copy on disk of the entire submission.
    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 Sec.  590.316.
    The Application is available for inspection and copying in the 
Office of Oil and Gas Global Security and Supply 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 July 18, 2013.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2013-17886 Filed 7-24-13; 8:45 am]
BILLING CODE 6450-01-P