Magnolia LNG received federal approval Thursday to export its liquefied natural gas to countries that lack free trade agreements — the final step of the regulatory process for the planned Lake Charles facility.
All that’s left to do before breaking ground is to secure enough buyers for the offtake.
“Our project timeline is now entirely related to the offtake process,” said Chief Operating Officer John Baguley. “The project is construction ready.” He said Magnolia has all the necessary permits, a completed design package and a construction contract in place.
Although only a small fraction of the expected 8 million tons per year of liquefied natural gas is now spoken for, company officials remain optimistic. Baguley said news that the regulatory process is complete, coupled with recent improvements in global energy markets, is “moving (Magnolia’s) offtake efforts in the right direction.”
The Department of Energy’s Thursday decision followed the Federal Energy Regulatory Commission’s rejection in late November of request for rehearing from environmental advocacy group Sierra Club.
The group filed the request in May after Magnolia received construction approval from FERC, arguing that Magnolia could increase domestic gas prices and have an adverse environmental impact. Once FERC rejected the argument, the DOE was clear to give Magnolia the OK to export to non-FTA countries.
Although the pre-construction approval process is complete, Magnolia LNG will continue to be regulated by FERC as it builds and operates.
“Going forward, we will be working with FERC on an ongoing basis as they are involved in approving specific work packages during the execution of the project, and have a regulatory role also during plant operation,” Baguley said. “We will be working closely with FERC for the next 20-plus years.”
The facility will be built on 120 acres at the intersection of Henry Pugh Boulevard and Big Lake Road. Officials expect the project to consist of four LNG trains that will cool the natural gas into liquid form for transport around the world. Each train is expected to produce 2 million tons of LNG a year and up to $4.8 billion over 20 years.
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