80 FR 42162 - Deepwater Port License Application: Delfin LNG, LLC, Delfin LNG Deepwater Port

DEPARTMENT OF TRANSPORTATION
Maritime Administration

Federal Register Volume 80, Issue 136 (July 16, 2015)

The Maritime Administration (MARAD) and the U.S. Coast Guard (USCG) announce they have received an application for the licensing of a liquefied natural gas (LNG) export deepwater port and that the application contains all required information. This notice summarizes the applicant's plans and the procedures that will be followed in considering the application.

[Federal Register Volume 80, Number 136 (Thursday, July 16, 2015)]
[Notices]
[Pages 42162-42165]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17465]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration

[Docket No. USCG-2015-0472]


Deepwater Port License Application: Delfin LNG, LLC, Delfin LNG 
Deepwater Port

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Notice of application.

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SUMMARY: The Maritime Administration (MARAD) and the U.S. Coast Guard 
(USCG) announce they have received an application for the licensing of 
a liquefied natural gas (LNG) export deepwater port and that the 
application contains all required information. This notice summarizes 
the applicant's plans and the procedures that will be followed in 
considering the application.

DATES: The Deepwater Port Act of 1974, as amended, requires any public 
hearing(s) on this application to be held not later than 240 days after 
publication of this notice, and a decision on the application not later 
than 90 days after the final public hearing.

ADDRESSES: The public docket for USCG-2015-0472 is maintained by the 
U.S. Department of Transportation, Docket Management Facility, West 
Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., 
Washington, DC 20590.
    The Federal Docket Management Facility accepts hand-delivered 
submissions, and makes docket contents available for public inspection 
and copying at this address between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays. The Federal Docket Management 
Facility's telephone number is 202-366-9329, the fax number is 202-493-
2251 and the Web site for electronic submissions or for electronic 
access to docket contents is http://www.regulations.gov. keyword search 
``USCG-2015-0472''.

FOR FURTHER INFORMATION CONTACT: Mr. Roddy Bachman, U.S. Coast Guard, 
telephone: 202-372-1451, email: [email protected] or
    Ms. Yvette M. Fields, Maritime Administration, telephone: 202-366-
0926, email: [email protected]. For questions regarding viewing the 
Docket, call Docket Operations, telephone: 202-366-9826.

SUPPLEMENTARY INFORMATION: 

Receipt of Application

    On May 8, 2015, MARAD and USCG received an application from Delfin 
LNG, LLC (Delfin LNG) for all Federal authorizations required for a 
license to own, construct, and operate a deepwater port (DWP) for the 
export of natural gas authorized under the Deepwater Port Act of 1974, 
as amended, 33 U.S.C. 1501 et seq. (the Act), and implemented under 33 
CFR parts 148, 149, and 150. After a coordinated completeness review by 
MARAD and other cooperating Federal agencies, it was determined that 
the application required supplemental information, and, by letter of 
May 29, 2015 to Delfin LNG, the USCG deemed the application incomplete. 
On June 22, 2015, in response to the USCG letter, Delfin LNG submitted 
the requested supplemental information entitled ``Deepwater Port 
License Application Delfin LNG Project May 8, 2015--Supplemented June 
19, 2015.'' It has now been determined that the application contains 
all information necessary to initiate processing of the application. 
The USCG deemed the application complete on June 29, 2015.
    Also on May 8, 2015, Delfin LNG filed an application with the 
Federal Energy Regulatory Commission (FERC) requesting authorizations 
pursuant to the Natural Gas Act and 18 CFR part 157. This application 
was noticed on FERC's Docket No. CP15-490-000 on May 20, 2015 and in 
the Federal Register (80 FR 30266-01). The following is an excerpt from 
that Federal Register Notice:

    Take notice that on May 8, 2015 Delfin LNG LLC (Delfin LNG), 
1100 Louisiana Street, Houston, Texas 77002, filed in Docket No. 
CP15-490-000, an Application pursuant to section 7(c) of the 
Commission's Regulations under the Natural Gas Act and Parts 157 of 
the Federal Energy Regulatory Commission's (Commission) regulations 
requesting authorization to (1) reactivate approximately 1.1 miles 
of existing 42-inch pipeline formerly owned by U-T Offshore System 
(UTOS), which runs from Transcontinental Gas Pipeline Company 
Station No. 44 (Transco Station 44) to the mean highwater mark along 
the Cameron Parish Coast; (2) install 74,000 horsepower of new 
compression; (3) construct 0.25 miles of 42-inch pipeline to connect 
the former UTOS line to the new meter station; and (4) construct 0.6 
miles of twin 30-inch pipelines between Transco Station 44 and the 
new compressor station in Cameron Parrish, Louisiana that comprise 
the onshore portion of Delfin LNG's proposed deepwater port (DWP), 
an offshore liquefied natural gas facility located off the coast of 
Louisiana in the Gulf of Mexico, all as more fully set forth in the 
application, which is on file with the Commission and open to public 
inspection. Additionally, Delfin LNG requests a blanket construction 
certificate under Part 17, Subpart F of the Commission's 
regulations. This filing may be viewed on the web at http://www.ferc.gov using the``eLibrary'' link. Enter the docket number 
excluding the last three digits in the docket number field to access 
the document. For assistance, please contact FERC at 
[email protected] or call toll-free, (886) 208-3676 or TYY, 
(202) 502-8659.
. . . .
    Delfin LNG's onshore facilities will connect with the DWP 
facilities that are subject to jurisdiction of the Maritime 
Authority [sic] (MARAD) and the United States Coast Guard (USCG). 
Additionally, as part of Delfin LNG's DWP, Delfin LNG proposes to 
lease a segment of pipeline from High Island Offshore System, LLC 
(HIOS) that extends from the terminus of the UTOS pipeline offshore. 
Delfin LNG states in its application that HIOS will submit a 
separate application with the Commission seeking authorization to 
abandon by lease its facilities to Delfin LNG.
    Because the review of the DWP proposal is the jurisdiction of 
MARAD and USCG, the Commission acknowledges Delfin LNG's application 
in Docket No. CP15-490-000 on May 8, 2015. However, the Commission 
will

[[Page 42163]]

not begin processing Delfin LNG's application until such time that 
MARAD and USCG accept Delfin LNG's DWP application, and HIOS submits 
an abandonment application with the Commission.

Background

    According to the Act, a deepwater port is a fixed or floating 
manmade structure other than a vessel, or a group of structures, 
including all components and equipment, including pipelines, pumping or 
compressor stations, service platforms, buoys, mooring lines, and 
similar facilities that are proposed as part of a deepwater port, 
located beyond State seaward boundaries and used or intended for use as 
a port or terminal for the transportation, storage, and further 
handling of oil or natural gas for transportation to, or from, any 
State.\1\
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    \1\ On December 20, 2012, the Coast Guard and Maritime 
Transportation Act of 2012 (Title III, Sec. 312) amended Section 
3(9)(A) of the Deepwater Port Act of 1974 (33 U.S.C. 1502(9)(A)) to 
insert the words ``or from'' before the words ``any State'' in the 
definition of Deepwater Port. This amendment grants MARAD the 
authority to license the construction of Deepwater Ports for the 
export of oil and natural gas from domestic sources within the 
United States to foreign markets abroad.
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    The Secretary of Transportation delegated to the Maritime 
Administrator authorities related to licensing deepwater ports (49 CFR 
1.93(h)). Statutory and regulatory requirements for licensing appear in 
33 U.S.C. 1501 et seq. and 33 CFR part 148. Under delegations from, and 
agreements between, the Secretary of Transportation and the Secretary 
of Homeland Security, applications are jointly processed by MARAD and 
USCG. Each application is considered on its merits.
    In accordance with 33 U.S.C. 1504(f) for all applications, MARAD 
and the USCG, working in cooperation with other Federal agencies and 
departments considering a DWP application shall comply with the 
National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et 
seq.). The U.S. Environmental Protection Agency (EPA), the U.S. Army 
Corps of Engineers (USACE), the National Oceanic and Atmospheric 
Administration (NOAA), the Bureau of Ocean Energy Management (BOEM), 
the Bureau of Safety and Environmental Enforcement (BSEE), and the 
Pipeline and Hazardous Materials Safety Administration (PHMSA), among 
others, are cooperating agencies and will assist in the NEPA process as 
described in 40 CFR 1501.6.; may participate in scoping meeting(s); and 
will incorporate the Environmental Impact Statement (EIS) into their 
permitting processes. Comments addressed to the EPA, USACE, or other 
federal cooperating agencies will be incorporated into the Department 
of Transportation (DOT) docket and considered as the EIS is developed 
to ensure consistency with the NEPA process.
    All connected actions, permits, approvals and authorizations will 
be considered in the deepwater port license application review. FERC 
has jurisdiction over the onshore components of the proposed deepwater 
port as well as the change in service of the offshore HIOS pipeline. As 
noted above, these matters will be addressed by FERC through a separate 
application process. FERC has also noted they cannot participate until 
such time as HIOS submits a pipeline abandonment application with the 
Commission. For purposes of the Delfin LNG DWP license application, 
MARAD and the USCG consider both the DWP application and the FERC 
application to be included in this review. For your convenience, we 
have included the Delfin LNG application to FERC under Docket Number 
USCG-2015-0472.
    MARAD, in issuing this Notice of Application pursuant to section 
1504(c) of the Act, must designate as an ``Adjacent Coastal State'' any 
coastal state which (A) would be directly connected by pipeline to a 
deepwater port as proposed in an application, or (B) would be located 
within 15 miles of any such proposed deepwater port (see 33 U.S.C. 
1508(a)(1)). On April 30, 2013, MARAD issued a Notice of Policy 
Clarification advising the public that nautical miles shall be used 
when determining Adjacent Coastal State status (78 FR 25349). Pursuant 
to the criteria provided in the Act, Louisiana and Texas are the 
Adjacent Coastal States for this application. Other states may apply 
for Adjacent Coastal State status in accordance with 33 U.S.C. 
1508(a)(2).
    The Act directs that at least one public hearing take place in each 
Adjacent Coastal State, in this case, Louisiana and Texas. Additional 
public meetings may be conducted to solicit comments for the 
environmental analysis to include public scoping meetings, or meetings 
to discuss the Draft EIS and the Final EIS.
    MARAD and USCG will publish additional Federal Register notices 
with information regarding these public meeting(s) and hearing(s) and 
other procedural milestones, including the NEPA environmental review. 
The Maritime Administrator's decision, and other key documents, will be 
filed in the public docket.
    The Deepwater Port Act imposes a strict timeline for processing an 
application. When MARAD and USCG determine that an application contains 
the required information, the Act directs that all public hearings on 
the application be concluded within 240 days after publication of this 
Notice of Application.
    Within 45 days after the final hearing, the Governor(s) of the 
Adjacent Coastal State(s), in this case the Governors of Louisiana and 
Texas, may notify MARAD of their approval, approval with conditions, or 
disapproval of the application. MARAD may not issue a license without 
the explicit or presumptive approval of the Governor(s) of the Adjacent 
Coastal State(s). During this 45 day time period, the Governor(s) may 
also notify MARAD of inconsistencies between the application and State 
programs relating to environmental protection, land and water use, and 
coastal zone management. In this case, MARAD may condition the license 
to make it consistent with such state programs (33 U.S.C. 1508(b)(1)). 
MARAD will not consider written approvals or disapprovals of the 
application from Governors of Adjacent Coastal States until the 45-day 
period after the final public hearing.
    The Maritime Administrator must render a decision on the 
application within 90 days after the final hearing.
    Should a favorable record of decision be rendered and license be 
issued, MARAD may include specific conditions related to design, 
construction, operations, environmental permitting, monitoring and 
mitigations, and financial responsibilities. If a license is issued, 
USCG would oversee the review and approval of the deepwater port's 
Floating Liquefied Natural Gas Vessels (FLNGVs) and in coordination 
with other agencies as appropriate review of engineering design and 
construction; operations/security procedures; waterways management and 
regulated navigation areas; maritime safety and security requirements; 
risk assessment; and compliance with domestic and international laws 
and regulations for vessels that may call on the port. The deepwater 
port would be designed, constructed and operated in accordance with 
applicable codes and standards.
    In addition, installation of pipelines and other structures, such 
as the Tower Yoke Mooring Systems (TYMSs), may require permits under 
Section 404 of the Clean Water Act and Section 10 of the Rivers and 
Harbors Act, which are administered by USACE.
    Permits from the EPA may also be required pursuant to the 
provisions of the Clean Air Act, as amended, and the Clean Water Act, 
as amended.

[[Page 42164]]

    As mentioned above, Delfin LNG has filed an application with FERC 
for a Certificate of Public Convenience and Necessity for the Delfin 
LNG Project Onshore Facilities as described in the FERC Federal 
Register notice (80 FR 30266-01). In order to achieve the goals of 
NEPA, this application to operate onshore facilities is included as a 
connected action for the proposed deepwater port and the environmental 
impact of its construction and operation will be included in the MARAD/
USCG NEPA review. However, to reiterate, FERC has stated it will not be 
able to commence processing Delfin LNG's application for the proposed 
onshore facility until such time as the HIOS abandonment application is 
filed.
    The Department of Energy (DOE) is also a cooperating agency. On 
February 20, 2014, DOE approved Delfin LNG's application to export LNG 
by vessel from its proposed deepwater port to Free Trade Agreement 
(FTA) nations. On November 12, 2013, Delfin LNG applied to the DOE for 
a long-term multi-contract authorization to export domestically 
produced LNG to non-FTA nations. Pursuant to DOE's revised procedures 
for LNG export decisions (79 FR 48132), the DOE will act on 
applications to export LNG to non-FTA nations only after the NEPA 
review is completed by the lead Federal agency, in this case the USCG 
and MARAD.

Summary of the Application

    Delfin LNG is proposing to construct, own, and operate a DWP 
terminal (referred to herein as the Delfin Terminal) in the Gulf of 
Mexico to liquefy natural gas for export to FTA and non-FTA nations.
    The proposed Project has both onshore and offshore components. The 
proposed DWP would be located in Federal waters within the Outer 
Continental Shelf (OCS) West Cameron Area, West Addition Protraction 
Area (Gulf of Mexico), approximately 37.4 to 40.8 nautical miles (or 43 
to 47 statute miles) off the coast of Cameron Parish, Louisiana, in 
water depths ranging from approximately 64 to 72 feet (19.5 to 21.9 
meters). The DWP would consist of four semi-permanently moored FLNGVs 
located as follows: #1 (29[deg]8'13.1'' N./93[deg]32'2.2'' W.), #2 
(29[deg]6'13.6'' N./93[deg]32'42.4'' W.), #3 (29[deg]6'40.7'' N./
93[deg]30'10.1'' W.), and #4 (29[deg]4'40.9'' N./93[deg]30'51.8'' W.), 
located in WC 319, 327, 328, and 334 blocks, respectively. It would 
reuse and repurpose two existing offshore natural gas pipelines: The 
former U-T Operating System (UTOS) pipeline, and the High Island 
Operating System (HIOS) pipeline. Four new pipeline laterals connecting 
the HIOS pipeline to each of the FLNGVs would be constructed. The feed 
gas would be supplied through these new pipeline laterals to each of 
the FLNGVs where it would be super cooled to produce LNG. The LNG would 
be stored onboard the FLNGV and transferred via ship-to-shop transfer 
to properly certified LNG trading carriers. Each of the FLNGVs would be 
semi-permanently moored to four new weather-vaning TYMSs.
    The onshore components in Cameron Parish, Louisiana consist of 
engineering, constructing, and operating a new natural gas compressor 
station, gas supply header and metering station at an existing gas 
facility. The proposal would require: (1) Reactivation of approximately 
1.1 miles of existing 42-inch pipeline, formerly owned by UTOS, which 
runs from Transcontinental Gas Pipeline Company Station No. 44 (Transco 
Station 44) to the mean high water mark along the Cameron Parish Coast; 
(2) installation of 74,000 horsepower of new compression; (3) 
construction of 0.25 miles of 42-inch pipeline to connect the former 
UTOS line to the new meter station; and (4) construction of 0.6 miles 
of twin 30-inch pipelines between Transco Station 44 and the new 
compressor station.
    Onshore pipeline quality natural gas from the interstate grid would 
be compressed and sent to the existing, but currently idled, 42-inch 
UTOS pipeline. The gas would be transported through the UTOS pipeline 
and would bypass the existing manifold platform located at West Cameron 
(WC) 167 approximately 24.7 nautical miles (28.4 statute miles) 
offshore in the Gulf of Mexico. The bypass of WC 167 would be a newly 
installed pipeline segment, 700 feet in length, connecting to the 
existing 42-inch HIOS pipeline.
    The bypass of the WC 167 platform would be trenched so that the top 
of the pipe is a minimum of 3 feet below the seafloor. From the bypass, 
the feed gas would then be transported further offshore using the HIOS 
pipeline portion leased by the Applicant between WC 167 and High Island 
A264. The existing UTOS and HIOS pipelines transect OCS Lease Blocks WC 
314, 318, 319, 327, and 335, and would transport feed gas from onshore 
to offshore (one-directional flow). Delfin LNG proposes to install four 
new lateral pipelines along the HIOS pipeline, starting approximately 
16.0 nautical miles (18.4 statute miles) south of the WC 167 platform. 
Each subsea lateral pipeline would be 30 inches in diameter and 
approximately 6,400 feet in length, extending from the HIOS pipeline to 
the Delfin Terminal.
    The FLNGVs would receive pipeline quality natural gas via the 
laterals and TYMS where it would be cooled sufficiently to totally 
condense the gas to produce LNG. The produced LNG would be stored in 
International Maritime Organization (IMO) type B, prismatic, 
independent LNG storage tanks aboard each of the FLNGVs. Each vessel 
would have a total LNG storage capacity of 165,000 cubic meters 
(m3).
    An offloading mooring system would be provided on each FLNGV to 
moor an LNG trading carrier side-by-side for cargo transfer of LNG 
through loading arms or cryogenic hoses using ship-to-ship transfer 
procedures. LNG carriers would be moored with pilot and tug assist. The 
FLNGV would be equipped with fenders and quick-release hooks to 
facilitate mooring operations. The offloading system would be capable 
of accommodating standard LNG trading carriers with nominal cargo 
capacities up to 170,000 m3. It is expected that the typical 
LNG cargo transfer operation would be carried out within 24 hours, 
including LNG trading carrier berthing, cargo transfer and sail-away.
    The FLNGVs would be self-propelled vessels and have the ability to 
disconnect from the TYMS and set sail to avoid hurricanes or to 
facilitate required inspections, maintenance, and repairs.
    In the nominal design case, each of the four FLNGVs would process 
approximately 330 million standard cubic feet per day (MMscfd), which 
would total 1.32 billion standard cubic feet per day (Bscf/d) of input 
feed gas for all four of the FLNGVs. Based on an estimated availability 
of 92 percent and allowance for consumption of feed gas during the 
liquefaction process, each FLNGV would produce approximately 97.5 
billion standard cubic feet per year (Bscf/y) of gas (or approximately 
2.0 million metric tonnes per annum (MMtpa)) for export in the form of 
LNG. Together, the four FLNGVs are designed to have the capability to 
export 390.1 Bscf/y of gas (or approximately 8.0 MMtpa) in the form of 
LNG.
    As detailed engineering and equipment specification advances during 
the design process, and operating efficiencies are gained post-
commissioning, the liquefaction process could perform better than this 
nominal design case. It is therefore anticipated that LNG output, based 
on the high-side design case of 375 MMscfd of input feed gas, would be 
as much as approximately 110.8 Bscf/y of gas (or approximately 2.3 
MMtpa) for each FLNGV. Taken together, the four FLNGVs would be capable 
of exporting the equivalent of 443.3 Bscf/y of natural gas in the form

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of LNG. Therefore, Delfin LNG is requesting authorization to construct 
and operate facilities capable of exporting up to 443.3 Bscf/y of 
natural gas in the form of LNG (which equates to approximately 9.2 
MMtpa).
    The proposed Project would take a modular implementation approach 
to allow for early market entry and accommodate market shifts. Offshore 
construction activities are proposed to begin first quarter (Q1) of 
2018 and would be completed in four stages. Each stage corresponds to 
the commissioning and operation of an FLNGV. The anticipated 
commissioning of FLNGV 1 is Q3 of 2019 with start-up of commercial 
operation of FLNGV 1 by the end of 2019. It is anticipated that FLNGVs 
2 through 4 would be commissioned 12 months apart. The Delfin Terminal 
would be completed and all four FLNGVs would be fully operational by 
the summer of 2022.

Privacy Act

    The electronic form of all comments received into the Federal 
Docket Management System can be searched by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). The DOT Privacy Act 
Statement can be viewed in the Federal Register published on April 11, 
2000 (Volume 65, Number 70, pages 19477-78) or by visiting http://www.regulations.gov.

    Authority:  33 U.S.C. 1501, et seq.; 49 CFR 1.93(h).

    Dated: July 13, 2015.

    By order of the Maritime Administrator.
T. Mitchell Hudson, Jr.,
Secretary, Maritime Administration.
[FR Doc. 2015-17465 Filed 7-15-15; 8:45 am]
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