DOE Streamlines LNG Export Requirements

Maritime Activity Reports, Inc.

December 23, 2018

Image: Department of Energy

Image: Department of Energy

The U.S. Department of Energy (DOE) would now only require U.S. LNG exporters to report the country or countries of LNG deliveries, not country of end-use, to satisfy the DOE’s destination reporting requirement.

Further, DOE announced additional efforts to streamline the reporting requirements for LNG export supply sales and contracts.

“With the United States now being the world’s top producer of oil and natural gas, it is imperative that U.S. LNG companies have all the tools they need to get their American product into the international market,” said U.S. Secretary of Energy Rick Perry.

“By streamlining the destination reporting requirements, the Department of Energy is taking an important deregulatory step forward in order to better provide reliable U.S. LNG to our friends and allies abroad,” Rick added.

“Increasing U.S. LNG exports to the world market brings great benefits to Americans here at home and our allies abroad from cleaner air to increased job growth and energy security,” said Assistant Secretary for Fossil Energy Steven Winberg.

“Right now, the U.S. is growing its position as a global leader in LNG exports and is projected to be the third largest in the world behind Australia and Qatar by the end of 2019. Today’s action is another way the Trump Administration is working to advance American energy dominance,” he added.

The policy change will address the reporting of LNG delivery destinations and the types of supply and sales agreements LNG exporters must file with DOE.  Currently, DOE requires some LNG export authorization holders to report the final country of end-use for LNG exports, which can differ from the country receiving the initial physical delivery of LNG.  

Given the complexity of some LNG export transactions, and the challenges associated with tracking LNG exports all the way to their point of end-use, DOE is indicating via a new policy statement that reporting the country or countries of LNG deliveries (not country of end-use) will satisfy the destination reporting requirement. With this change in reporting requirements, LNG exporters are still required to continue the current ban on LNG exports to sanctioned countries.

Additionally, DOE is seeking to clarify via a proposed interpretative rule which types of supply and sales contract agreements need to be reported and when they must be filed. Per DOE’s current regulations, it is required of all long-term LNG export authorization holders to report all long-term, greater than two years, supply and sales contracts. This proposed interpretive rule is open for public comment for 30 days.

Since exports of U.S. LNG began from the lower 48-states in 2016, over 1.7 trillion cubic feet of U.S. natural gas has been exported.  To date, the Department of Energy has approved 23.05 Bcf/d of long-term exports of natural gas to any country in the world not prohibited by U.S. law or policy.  

There are currently three large-scale LNG export projects in operation, Sabine Pass, Dominion Cove Point, and Corpus Christi, which have a combined operating export capacity of approximately 4 Bcf/d.  Three additional large-scale export are under construction.  There are also a dozen large-scale export projects under review that would provide over 20 billion cubic feet per day of additional export capacity, if approved and constructed.

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