Annova's Texas Brownsville LNG export plant passes environmental test

12/14/2018

(Reuters) - Annova LNG's proposed Brownsville liquefied natural gas export terminal in Texas took a step toward receiving federal approval for construction on Friday after staff at the federal energy regulator issued a draft environmental report.

In the report, known as an environmental impact statement, staff at the Federal Energy Regulatory Commission (FERC) concluded construction and operation of the project would result in some adverse environmental impacts, but those impacts "would not be significant" if the company follows recommendations in the draft report.

FERC said in a release its commissioners will take the FERC staff's recommendations into consideration when they decide on the project. FERC did not say when the commissioners would make that decision.

The Brownsville project includes liquefaction facilities, two LNG storage tanks, a pipeline meter station and marine transfer facilities.

Annova, which is backed by Chicago-based energy company Exelon Corp, said on its website the Brownsville project would cost nearly $3 billion.

The project is designed to produce 6.0 million tonnes per annum (MTPA) of LNG, which is roughly 0.8 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet is enough gas to fuel about 5 million homes for a day.

Annova said it plans to make a final investment decision to build the project in the fourth quarter of 2019 and put the facility into service in 2024.

Annova's project is one of dozens of LNG export terminals under development in the United States, Canada and Mexico seeking customers so they can get built over the next several years to meet growing global demand for the fuel.

In addition to Annova, at least two other firms also want to build a LNG export terminal in the Brownsville area, Texas LNG and NextDecade Corp's Rio Grande LNG.

The United States became a net exporter of gas, including LNG, for the first time in 60 years in 2017. Looking at the plants currently under construction, U.S. LNG export capacity is expected to rise to 8.9 bcfd in 2019 and 10.3 bcfd in 2020, from around 5.2 bcfd in service now.

Other companies involved in the Annova project include Black & Veatch Corp and Kiewit Corp.

(Reporting by Scott DiSavino; editing by Chris Reese)