16
reactivation of its previous onshore interconnections with the major interstate pipelines and
modifications to reverse flow, the pipeline will allow the Liquefaction Facility to access the
domestic natural gas interstate pipeline system.
47
Delfin states that it has entered into a memorandum of understanding (MOU) with a
midstream LNG company to provide at least the first two FLNGVs. According to Delfin, the
focus of the MOU is to develop fast track, modular, mid-scale liquefaction solutions of
approximately 2.5 million metric tons per annum (mtpa) per train, based on existing technology
and using completed Front-End Engineering and Designs. Delfin anticipates that the third and
fourth LNG trains will be provided by new-build FLNGVs. Delfin states that these two trains
will provide liquefaction capacity of 4.0 mtpa each, bringing the total capacity of the
Liquefaction Facility to approximately 13 mtpa of LNG.
48
C.
Procedural History
On October 7, 2013, in FE Docket No. 13-129-LNG, Delfin filed a separate application
requesting authorization under NGA section 3(c) to export the same volume of LNG requested
herein (657.5 Bcf/yr) from the Liquefaction Facility to FTA countries for a 20-year period. On
February 20, 2014, DOE/FE granted that application in DOE/FE Order No. 3393.
49
Delfin states
that the non-FTA export volume requested in the Application is the same volume of LNG as
approved in DOE/FE Order No. 3393, and therefore would not be additive to that FTA export
volume.
50
47
A map showing both the location of WC 167 and the existing gas pipeline is attached to the Application as
Appendix C.
48
See Delfin App. at 7.
49
See supra note 13.
50
Delfin App. at 2, 8.
17
D.
Business Model
Delfin requests authorization to export LNG on its own behalf or as agent for other
entities who hold title to the LNG at the time of export. Delfin states that it will comply with all
DOE/FE requirements for exporters and agents, including registration requirements. Delfin
states that it is engaged in commercial negotiations with numerous potential customers. Delfin
states that, consistent with DOE/FE precedent, it will file under seal any relevant long-term
commercial agreements for natural gas liquefaction and LNG export services between Delfin and
its customers, once those agreements have been executed.
51
E.
Source of Natural Gas
Delfin intends to export domestically produced natural gas sourced from both
conventional and non-conventional production. Delfin anticipates that this natural gas will be
available from the interstate pipeline grid, and delivered through the connection to its dedicated,
existing pipeline to the proposed Liquefaction Facility. Delfin states that, through its connection
with the interstate pipeline systems, the Liquefaction Facility will have the capability to access
abundant, diverse supplies of natural gas across the United States, including Texas and
Louisiana.
52
V.
APPLICANT’S PUBLIC INTEREST ANALYSIS
Delfin contends that its proposed exports are consistent with the public interest under
section 3(a) of the NGA. Specifically, Delfin asserts that DOE/FE’s approval of its Application
will be consistent with DOE/FE’s 1984 Guidelines; will not pose a threat to domestic supply
security; will support development of domestic natural gas; will reduce the United States’ trade
imbalance; and will promote international relations. Delfin also contends that DOE/FE’s 2012
51
See id. at 7-10.
52
See id. at 5, 7.
18
Export Study and other economic studies (incorporated herein by reference) provide evidence
that the United States will benefit from the export of domestically produced LNG, consistent
with the public interest. In support of this position, Delfin address the following factors: (i) the
unique benefits of the proposed Liquefaction Facility; (ii) the adequacy of domestic supply of
natural gas; (iii) potential effect on domestic natural gas prices; and (iv) domestic benefits of
LNG exports.
53
A.
Unique Benefits of the Liquefaction Facility
Delfin states that the offshore location of its proposed Liquefaction Facility provides
unique benefits relative to shore-based LNG export terminals. First, Delfin states that its
offshore location enables it to avoid certain environmental and land-owner concerns that arise
with shore-based facilities, as well as seaway congestion issues that (according to Delfin) may be
problematic for some LNG export terminals to be located on the Gulf Coast. Delfin notes that
because its FLNGVs are powered and mobile, they can be moved away from the mooring
location to avoid hurricanes or other storm systems that could pose a threat to or interrupt
service.
54
Delfin next states that it “expects to be among the most environmentally friendly LNG
liquefaction facilities in the world.”
55
The Liquefaction Facility will burn only natural gas, and
will use air cooling and closed loop cooling (and no sea water) for all of its systems. Delfin
states that it will utilize existing domestic natural gas infrastructure (such as the UTOS pipeline),
thereby avoiding the need for new construction while providing a new use for infrastructure
otherwise slated for abandonment. Finally, Delfin contends that the Liquefaction Facility will
53
See Delfin App. at 10-15.
54
Id. at 16.
55
Id.
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