Cambridge Energy (CE) has withdrawn its application to the U.S. DOE for long-term multi-contract authorization to export previously imported or domestically produced liquefied natural gas (LNG) up to the equivalent of 0.038 billion cubic feet of natural gas per year to Free Trade Agreement (FTA) countries.
In the LNG Export Application, CE requested authorization to export LNG from a deepwater terminal CE proposed to construct, own, and operate.
As the first US company focused on exporting, rather than importing, LNG from a deepwater port, CE completed a detailed review of the Deepwater Port Act of 1974 (DWPA) in December 2010. The review was conducted to determine the appropriate agency which would provide regulatory oversight over the company’s proposed deepwater LNG export terminal. However, the company identified that the DWPA does not address the export of LNG from a deepwater port at all.
In January 2011, CE sought guidance from the Department of Energy, the agency charged with developing and coordinating national energy policy. CE outlined the issue regarding exporting LNG from a deepwater port. DOE provided contacts to CE, and made initial contacts with other participating agencies. In November 2011, CE met with DOE in Washington D.C. to review both the project and LNG Export Application.
In the same month, CE met with both the US Coast Guard (USCG) and the US Department of Transportation Maritime Administration (MARAD) to review the project, gain insight on issues surrounding the project, and establish a timeline for filing a deepwater port application. On December 5, 2011, CE submitted a formal letter requesting an opinion from MARAD whether the proposed LNG terminal falls under the DWPA. On February 22, 2012, MARAD informed CE that MARAD would have to make an internal decision regarding its authority to determine if CE could export under the DWPA. On April 17, 2012, MARAD informed CE that there is pending legislation which prevented MARAD from making a determination on the CE project. On April 23, 2012, CE engaged in a teleconference call with MARAD and USCG in which MARAD confirmed to CE that there is pending pre-decisional legislation.
This was apparently in reference to draft legislation submitted in a letter on April 16, 2012 by the U.S. Department of Transportation Secretary to the Speaker of the House of Representatives and the President of the Senate. Sec. 116 therein expands the definition of “deepwater port” in Section 3(9) of the DWPA (33 U.S.C. 1502(9)(A)) from one limited to imports “to any state” to one including exports “from any state.”
CE said that it can no longer afford to delay a significant segment of its business in order to wait for the necessary regulatory framework to be established. As CE remains interested in a deepwater port approach, CE may revisit this strategy in the future in the event that participating agencies develop a clear regulatory framework.
LNG World News Staff, October 2, 2012