Importation or Exportation of Liquified Natural Gas or Electric Energy; Applications, Authorizations, etc.: Delfin LNG LLC

Delfin LNG LLC; Request for Supplemental Order Granting Conditional Extension of Time for Long-Term Authorization To Export Liquefied Natural Gas

Dates

Protests, motions to intervene, or notices of intervention, as applicable, and written comments are to be filed as detailed in the Public Comment Procedures section no later than 4:30 p.m., eastern time, April 29, 2024.

Supplementary Information

Background

On June 1, 2017, in DOE/FE Order No. 4028 (as amended), ⁽¹⁾ DOE authorized Delfin to export domestically produced LNG by vessel from the proposed Delfin Liquefaction Project (Project), a floating liquefaction facility to be located in the Gulf of Mexico off the coast of Cameron Parish, Louisiana, to any country with which the United States has not entered into a free trade agreement (FTA) requiring national treatment for trade in natural gas, which currently has or in the future develops the capacity to import LNG, and with which trade is not prohibited by U.S. law or policy (non-FTA countries). ⁽²⁾ Delfin is authorized to export this LNG in a volume equivalent to 657.5 billion cubic feet per year of natural gas for a term extending through December 31, 2050. ⁽³⁾

Because Delfin's Project will be a "deepwater port" within the meaning of the Deepwater Port Act of 1974, as amended (DWPA), 33 U.S.C. 1501 et seq., the Project requires a deepwater port license from the U.S. Department of Transportation Maritime Administration (MARAD), in conjunction with the U.S. Coast Guard. ⁽⁴⁾ In the Request, Delfin explains that, although it has received a favorable Record of Decision from MARAD, it has been waiting for "nearly two years" for MARAD to issue a final deepwater license authorizing the operation of Delfin's offshore facilities. ⁽⁵⁾

Delfin's Project also involves certain onshore components that required the authorization of the Federal Energy Regulatory Commission (FERC), which Delfin received in 2017. ⁽⁶⁾ Delfin states that, on October 4, 2023, it obtained an extension from FERC of the deadline to construct and place its onshore facilities into service-from September 28, 2023, to September 28, 2027. ⁽⁷⁾

As relevant here, Order No. 4028 requires Delfin to "commence export operations using the planned liquefaction facilities no later than seven years from the date of issuance of [the] Order"- i.e., by June 1, 2024. ⁽⁸⁾

Request for Conditional Extension

In its Request, Delfin asks DOE to issue a supplemental order that would "modify" Order No. 4028 to provide Delfin a five-year "conditional extension of time" for Delfin to commence export operations from the Project-from June 1, 2024, to June 1, 2029. ⁽⁹⁾ Delfin states that this Request is consistent with DOE's Policy Statement on Export Commencement Deadlines (Commencement Extension Policy) issued on April 26, 2023. ⁽¹⁰⁾

Specifically, Delfin proposes that DOE "grant only a conditional extension that requires Delfin to certify by no later than nine (9) months after DOE/FECM's order that it has: (1) obtained the final DWPA license (to the extent that this has not occurred prior to DOE/FECM granting the conditional extension); (2) secured necessary financing arrangements to construct its first FLNGV [floating LNG vessel] and the Deepwater Port; (3) made its positive FID [Final Investment Decision] with respect to first FLNGV; and (4) issued an unconditional, full NTP [Notice to Proceed] for first FLNGV to the EPCI [Engineering, Procurement, Construction and Integration] contractor pursuant to the binding, executed EPCI contract."  ⁽¹¹⁾

Delfin states that, although it "is confident in its ability to satisfy those conditions within the requested time period, should it fail to do so then the export authorizations would expire at the end of that period."  ⁽¹²⁾ Delfin further contends that "imposition by DOE/FECM of these conditions on the extension of time will eliminate soon any uncertainty about the status of Delfin's project, providing assurance to DOE (and all other stakeholders and interested observers) that Delfin will actually commence LNG exports by the extended deadline."  ⁽¹³⁾ Delfin thus asserts that its Request "satisf[ies] the objective of the Commencement Extension Policy of reducing the `regulatory overhang' between authorized export volumes and projects actually moving forward."  ⁽¹⁴⁾

In support of its Request, Delfin asserts that good cause exists to grant the requested conditional extension of time, and that Delfin's authorized exports remain in the public interest. Delfin also states that it meets the criteria established by DOE in the Commencement Extension Policy for such requests. Specifically, Delfin argues that its Project "has been delayed by a series of extenuating circumstances outside its control,"  ⁽¹⁵⁾ and that "[m]uch of the infrastructure for [the Project] has already been constructed and is in existence, namely the large offshore natural gas pipelines that will transport feed gas to the FLNGVs."  ⁽¹⁶⁾

Additionally, Delfin distinguishes its floating offshore Project from "the land-based LNG export projects holding all other non-FTA authorizations."  ⁽¹⁷⁾ Delfin states that "the key part" of its Project, the FLNGVs, "will be constructed in existing shipyards overseas."  ⁽¹⁸⁾ Delfin describes both its commercial progress to date for the FLNGV construction and the remaining steps needed to reach FID. ⁽¹⁹⁾

Delfin states that, because it is not requesting an extension of its export term under Order No. 4028, as amended (which ends on December 31, 2050), or an increase in its authorized export volume, "the result of the extension will be that Delfin will have five years fewer to export LNG for a significant decrease in the total volumes of LNG exports under the authorization than was previously authorized."  ⁽²⁰⁾

Finally, Delfin asks DOE to grant the Request by its existing export commencement deadline of June 1, 2024. If DOE is unable to act on the Request by this date, Delfin asks DOE to "toll" the existing June 1, 2024, export commencement deadline in Order No. 4028 in light of the pending Request, so that "the existing non-FTA authorization would not expire and DOE/FECM could subsequently grant the conditional extension notwithstanding passage of the pre-existing deadline."  ⁽²¹⁾

Additional details can be found in the Request, posted on the DOE website at: www.energy.gov/sites/default/files/2024-03/Delfin%20DOE%20Extension%20request%20%28030124%20FINAL%29.pdf.

DOE Evaluation

In reviewing Delfin's Request, DOE will consider any issues required by law or policy under NGA section 3(a), DOE's regulations, DOE's Commencement Extension Policy, and any other documents deemed appropriate.

Parties that may oppose the Request should address these issues and documents in their comments and/or protests, as well as other issues deemed relevant to the Request.

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 environmental responsibilities.

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, addressing the Request. Interested parties will be provided 30 days from the date of publication of this Notice in which to submit comments, protests, motions to intervene, or notices of intervention. The public previously was given an opportunity to intervene in, protest, and comment on Delfin's non-FTA application in Docket No. 13-147-LNG. ⁽²²⁾ Therefore, DOE will not consider comments or protests that do not bear directly on this Request.

Any person wishing to become a party to this proceeding evaluating Delfin's Request must file a motion to intervene or notice of intervention. ⁽²³⁾ The filing of comments or a protest with respect to the Request will not serve to make the commenter or protestant a party to this 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 Request. All protests, comments, motions to intervene, or notices of intervention must meet the requirements specified by the regulations in 10 CFR part 590, including the service requirements.

Filings may be submitted using one of the following methods:

(1) Submitting the filing electronically at [email protected];

(2) Mailing the filing to the Office of Regulation, Analysis, and Engagement at the address listed in the ADDRESSES section; or

(3) Hand delivering the filing to the Office of Regulation, Analysis, and Engagement at the address listed in the ADDRESSES section.

For administrative efficiency, DOE prefers filings to be filed electronically. All filings must include a reference to "Docket No. 13-147-LNG" or "Delfin LNG LLC Request" in the title line.

For electronic submissions: 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.

The Request, and any filed protests, motions to intervene, notices of intervention, and comments will be available electronically on the DOE website at www.energy.gov/fecm/regulation.

A decisional record on the Request 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. If an additional procedure is scheduled, notice will be provided to all parties. If no party requests additional procedures, a final Order may be issued based on the official record, including the Request and responses filed by parties pursuant to this Notice, in accordance with 10 CFR 590.316.

⁽¹⁾ Delfin LNG LLC, DOE/FE Order No. 4028, Docket No. 13-147-LNG (June 1, 2017), reh'g denied, Order No. 4028-A (Apr. 3, 2018), amended by Order No. 4028-B (Dec. 10, 2020) (extending export term), further amended by Order No. 4028-C (May 18, 2021) (correcting and amending location of floating LNG vessels). In addition, Delfin's export authorization was amended by DOE/FE Order No. 4641 (Dec. 18, 2020) to include short-term export authority on a non-additive basis.

⁽²⁾  15 U.S.C. 717b(a).

⁽³⁾ Delfin LNG LLC, DOE/FE Order No. 4028, as amended in Order No. 4028-B (Ordering Para. A).

⁽⁴⁾  For more information on MARAD's deepwater port licensing, see Delfin LNG LLC, DOE/FE Order No. 4028, at 1-3, 126-35 (summarizing MARAD's process and Delfin's status at that time), 173 (Ordering Para. H), and Request at 5, 22-27.

⁽⁵⁾ See Request at 2, 22-26.

⁽⁶⁾  For more information on FERC's jurisdiction over limited onshore components of the Project, see Delfin LNG LLC, DOE/FE Order No. 4028, at 2-3, 173 (Ordering Para. H), and Request at 6 n.9, 7 n.12, 8 n.13.

⁽⁷⁾ See Request at 6 n.9, 26-27 (citing Delfin LNG LLC, 185 FERC ¶ 61,009 (2023)).

⁽⁸⁾ Delfin LNG LLC, DOE/FE Order No. 4028, at 173 (Ordering Para. D). Additionally, Delfin asks DOE to amend its existing FTA authorization (DOE/FE Order No. 3393, as amended). DOE will address the FTA portion of the Request separately pursuant to NGA section 3(c), 15 U.S.C. 717b(c).

⁽⁹⁾  Delfin LNG LLC, Request for Supplemental Order Granting Conditional Extension of Time for Long-Term Authorizations to Export Liquefied Natural Gas, Docket No. 13-147-LNG, at 32, 43 (Mar. 1, 2024) [hereinafter Request]. Delfin states that it is not seeking to modify any other aspect of its Project or non-FTA authorization. See id. at 2.

⁽¹⁰⁾  U.S. Dep't of Energy, Policy Statement on Export Commencement Deadlines in Authorizations to Export Natural Gas to Non-Free Trade Agreement Countries, 88 FR 25272 (Apr. 26, 2023), https://www.energy.gov/sites/default/files/2023-06/Policy%20Statement%20on%20Export%20Commencement%20Deadlines%20in%20Authorizations%20to%20Export%20Natural%20Gas%20to%20Non-Free%20Trade%20Agreement%20Countries.pdf [hereinafter Commencement Extension Policy].

⁽¹¹⁾  Request at 5; see also id. at 37.

⁽¹²⁾ Id. at 5.

⁽¹³⁾ Id. at 5-6.

⁽¹⁴⁾ Id. at 6.

⁽¹⁵⁾ Id. at 3-4 (citing, e.g., "the continuing evolution of FLNGV technology requiring a series of refinements of the project, complications related to trade with China, the impacts of the COVID-19 epidemic, the related slowdown in market demand for LNG, and significant challenges with the MARAD licensing process").

⁽¹⁶⁾  Request at 4; see also id. at 11-16.

⁽¹⁷⁾ Id. at 4.

⁽¹⁸⁾ Id.

⁽¹⁹⁾ Id. at 4, 16-22, 27-31.

⁽²⁰⁾ Id. at 33.

⁽²¹⁾  Request at 6.

⁽²²⁾ See supra note 1.

⁽²³⁾  Status as an intervenor in prior proceeding(s) in this docket does not continue to this proceeding evaluating Delfin's Request, and therefore any person interested in intervening to address the Request must file a new motion to intervene (or notice of intervention, as applicable). 10 CFR 590.303.