Gulf LNG Liquefaction Co. (GLLC) and Gulf LNG Energy (GLE) on June 19 collectively filed an application with the Federal Energy Regulatory Commission (FERC) requesting authority to construct and operate new natural gas liquefaction and export facilities at GLE’s existing liquefied natural gas (LNG) regasification terminal located in Jackson County, Mississippi, near Pascagoula.
Additionally, Gulf LNG Pipeline (GLP) notified the FERC that minor modifications will be made to the existing pipeline facilities that currently interconnect with the terminal under GLP’s blanket authorization from the FERC.
The applicants have requested that the FERC grant authorization of these requests no later than June 17, 2016.
Subject to obtaining sufficient long-term customer commitments, anticipated capital expenditures for the project at full development total approximately $8 billion. Anticipated capital for a single LNG train in phase one totals approximately $5 billion and approximately $3 billion for a second train in phase two. The in-service date for phase one is anticipated in the fourth quarter of 2020 and the fourth quarter of 2021 for phase two.
“The proposed Gulf LNG Liquefaction Project will be a world-class facility within an existing world-class deep water port and, importantly, be located in an energy friendly state and benefit from a supportive community,” said Kinder Morgan East Region Natural Gas Pipeline President Kimberly S. Watson. “In addition, it will have a number of other distinct advantages, including: the ability to utilize existing infrastructure, minimizing typical new LNG construction risks; it will be built and operated by a seasoned LNG operations team; the facility will have abundant and diverse natural gas supply options and easy access to international shipping lanes.”
The project has already received U.S. Department of Energy (DOE) Free Trade Agreement (FTA) export authority and non-FTA authority is pending. In June 2012, GLLC received approval from the DOE to export up to 11.5 million tonnes per annum (MTPA) of LNG. In August 2012, GLLC submitted a filing to the DOE seeking approval to export up to the same volume of LNG to non-FTA countries.
The project will include the installation of natural gas pre-treatment, liquefaction and export facilities at the terminal with a total peak capacity of up to 11.5 MTPA. The average expected send-out rate for the proposed facility will be approximately 1.5 billion cubic feet per day (Bcf/d) of LNG. These facilities will allow the terminal to liquefy domestic natural gas delivered by pipeline, store the LNG in the terminal’s existing LNG storage tanks and load it into LNG vessels via the terminal’s existing marine jetty. The terminal will retain its current capability to receive, store, regasify and deliver natural gas into the interstate pipeline system as originally constructed, thereby making the Gulf LNG Terminal bi-directional.
The project is divided into two phases:
Phase one will consist of a single liquefaction train expected to have a base LNG production capacity of approximately 5 MTPA. The LNG produced by this train will be stored in the terminal’s two existing LNG storage tanks, which have a combined capacity of 320,000 cubic meters (equivalent to 6.6 billion standard cubic feet of natural gas). The stored LNG will then be loaded onto ships berthed at the existing dock facility.
Phase two will consist of a second liquefaction train identical in size to the first train, providing a total project base level liquefaction capacity of 10 MTPA, which GLLC expects could be exceeded by more than 10 percent once the project is in operation.
GLLC, GLE and GLP are each owned by Gulf LNG Holdings Group LLC, which is owned 50% by Southern Gulf LNG Co. LLC, a wholly-owned subsidiary of Kinder Morgan, and operator of the Gulf LNG Terminal, and 30% by Thunderbird LNG LLC. Thunderbird is a wholly owned subsidiary of Thunderbird Resources Equity LLC, which is jointly owned by GSO Capital Partners and Chatham Asset Management. GSO is owned by The Blackstone Group LP. The remaining 20% is owned by subsidiaries of Arc Logistics Partners LP and Lightfoot Capital Partners LP.
Project will feature General Electric turbines for refrigerant duties
Said the application in describing the LNG system: "Each phase of the Project will consist of installation of one liquefaction train equal to an approximate, nominal output capacity of 5 MTPA. The configuration of the LNG Trains will be based on the Air Products and Chemicals Incorporated (APCI C3-MR) process with one APCI manufactured Main Cryogenic Heat Exchanger (“MCHE”) per train. In each LNG train, the Propane and Mixed Refrigerant compressors will be driven by two (2) GE LMS 100 turbines and associated helper motors. Gas will be cooled and liquefied by heat exchange with a mixture of propane, ethane, and methane in a MCHE. The product LNG liquid stream leaves the MCHE and passes through the energy extraction LNG Hydraulic Turbine, which reduces the pressure of the LNG. This energy extraction effectively serves as low level refrigeration that reduces LNG temperature and increases LNG production. The LNG is then sent to the existing cryogenic storage tanks and stored at atmospheric pressure at approximately -256 °F."
The application said about essential backup power generation: "Four essential diesel power generators rated at 2,500 kW each will be installed to serve as a reliable power source for critical equipment and safe plant shutdown in the event of local utility power failure. The essential backup power generators will be diesel fuel driven. Bulk storage of diesel will be provided in a single above ground storage tank with a working capacity of 14,300 cubic ft (“ft3”) and secondary containment. Each generator will be provided with a standard diesel day tank. The generators will be located in the Utility Area at the south end of the Expanded Terminal."
This project is an expansion of GLE’s existing terminal, which is part of the Port of Pascagoula. The application for the construction and operation of the terminal and Gulf LNG Pipeline was filed in 2005 with the FERC, with the commission granting approval in 2007. The terminal went in-service in October 2011.
The existing terminal includes:
A single dock facility that is currently permitted to receive up to 170,000 cubic meter LNGC vessels;
Two full containment LNG storage tanks, each with a capacity of 160,000 cubic meters; and
Electrical service provided by Mississippi Power via a dedicated 23,000 volt line. A transformer steps the voltage feed down to 4,160 volts for service to the terminal via a single motor control center. The terminal also has two gas turbine generators to provide essential backup power generation, each having a capacity of approximately 12 MW.
Kinder Morgan (NYSE: KMI) is the largest energy infrastructure company in North America. It owns an interest in or operates 84,000 miles of pipelines and 165 terminals. The company’s pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke. Kinder Morgan is the largest midstream and third largest energy company in North America with an enterprise value of approximately $130 billion.