E8-21059. Cheniere Marketing, Inc.; Application for Blanket Authorization To Export Liquefied Natural Gas

AGENCY:

Office of Fossil Energy, DOE.

ACTION:

Notice of Application.

SUMMARY:

The Office of Fossil Energy (FE) of the Department of Energy (DOE) gives notice of receipt of an application, filed on August 15, 2008 by Cheniere Marketing, Inc. (CMI), as modified on August 28, 2008, requesting blanket authorization to export liquefied natural gas (LNG) that previously had been imported from foreign sources in an amount up to the equivalent of 64 Billion cubic feet (Bcf) of natural gas on its own behalf or as agent for others on a short-term or spot market basis from the Sabine Pass LNG terminal owned by CMI's affiliate, Sabine Pass LNG, L.P., in Cameron Parish, Louisiana to the United Kingdom, Belgium, Spain, France, Italy, Portugal, Turkey, Brazil, Argentina, Chile, Mexico, Dominican Republic, Japan, South Korea, India, China, Taiwan and/or the Commonwealth of Puerto Rico over a two-year period commencing on the date of the authorization.

The application was filed under section 3 of the Natural Gas Act (15 U.S.C. 717b), as amended by section 201 of the Energy Policy Act of 1992 (Pub. L. 102-486). 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 at the address listed below no later than 4:30 p.m., eastern time, October 10, 2008.

ADDRESSES:

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 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, [phone]; [phone].

Edward Myers, U.S. Department of Energy, Office of General Counsel, Fossil Energy and Energy Efficiency, Forrestal Building, Room 6B-159, 1000 Independence Ave., SW., Washington, DC 20585, [phone].

SUPPLEMENTARY INFORMATION:

Background

CMI is a Delaware corporation with its principal place of business in Houston, Texas. CMI is a wholly-owned subsidiary of Cheniere Energy, Inc. (Cheniere Energy), which is also a Delaware corporation with its primary place of business in Houston, Texas. Cheniere Energy is a developer of LNG import terminals and natural gas pipelines on the U.S. Gulf Coast.

The Federal Energy Regulatory Commission (FERC) has authorized Sabine Pass LNG, L.P. to site, construct, and operate a new LNG import, storage, and vaporization terminal in Cameron Parish, Louisiana with a total send-out capacity of 4 Bcf/day to be completed in two phases.^[1] CMI states that Phase I consists of 2.6 Bcf/day of send-out capacity that is due to be placed into service in the near term; however, 2.0 Bcf/day of the Phase I capacity is subscribed under long-term contracts for service that is not expected to commence until April 2009, at the earliest. Phase II, consisting of 1.4 Bcf/day of capacity, is currently under construction and is anticipated to be placed into service during the second quarter of 2009.

On January 29, 2007, FE granted CMI blanket authorization to import LNG from various international sources for a two-year term beginning on January 29, 2007.^[2]

Current Application

In the instant application, CMI is seeking blanket authorization to export LNG that has been imported into the United States over a two-year period, on a short-term or spot market basis, in an amount up to the equivalent of 64 Bcf of natural gas.

Public Interest Considerations

In support of its application, CMI states that there is no domestic reliance on the LNG that it seeks to export. It indicates that the gas which it seeks to export is restricted to foreign sourced LNG. CMI adds that, due to global LNG market conditions, U.S. natural gas demand and prices do not currently support the importation of LNG into the U.S., and the export authorization sought herein would provide U.S. gas consumers two principal benefits: (1) It would foster the continuing operation of U.S. energy infrastructure by enabling the applicant to economically import LNG for the maintenance and continual operation of the Sabine Pass facilities during periods when market conditions may not otherwise favor deliveries of LNG into the U.S.; and (2) to the extent imported LNG may be needed to meet U.S. gas demand, the authorization would help to ensure that such supply is available and ready for delivery to U.S. markets. CMI, therefore, asserts in its application that a grant of the proposed authorization would not reduce U.S. natural gas supplies but would actually increase domestic supplies because it would encourage CMI to obtain and store spot-market LNG cargoes, making it available to supply domestic markets when conditions support it, thereby also serving to moderate U.S. natural gas prices.

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. 00-002.00G (Jan. 29, 2007) and DOE Redelegation Order No. 00-002.04C (Jan. 30, 2007). 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.

CMI 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.

The National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq., 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.

Public Comment Procedures

In response to this notice, any person may file a protest, motion to intervene or notice of intervention and written comments, as provided in DOE's regulations at 10 CFR section 590.301, et seq. Any person wishing to become a party to the proceeding and to have their written comments considered as a basis for any decision on the application must file a motion to intervene or notice of intervention, as applicable. The filing of a protest with respect to the application will not serve to make the 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, motions to intervene, notices of intervention, and written comments must meet the requirements specified by the regulations in 10 CFR part 590. Protests, motions to intervene, notices of intervention, requests for additional procedures, and written comments should be filed with the Office of Oil and Gas Global Security and Supply at the address listed above.

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 Cheniere Marketing, Inc. is available for inspection and copying in the Office of Oil and Gas Global Security and Supply docket room, 3E-042, at the above address. 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 is also available electronically by going to the following Web address: http://www.fe.doe.gov/​programs/​gasregulation/​index.html.

Issued in Washington, DC, on September 4, 2008.

Robert F. Corbin,

Manager, Natural Gas Regulatory Activities, Office of Oil and Gas Global Security and Supply, Office of Fossil Energy.

Footnotes

1.  Sabine Pass LNG, L.P., Order Granting Authority Under Section 3 of the Natural Gas Act and Issuing Certificates, 109 FERC ¶ 61,324 (2004) (Phase I); and Sabine Pass LNG, L.P., Order Granting Authority Under Section 3 of the Natural Gas Act, 115 FERC ¶ 61,330 (2006) (Phase II).

2.  Cheniere Marketing, Inc., DOE/FE Order No. 2327, issued January 29, 2007.