fb tracking

Protest of Gulf LNG

By Tyson Slocum

Today in Federal Energy Regulatory Commission docket CP15-521-001, Public Citizen protested the February 22 request of Gulf LNG to extend time to complete its proposed LNG export terminal adjacent to the Grand Bay Savannah Coastal Preserve just outside Pascagoula, Mississippi by five years, from July 16, 2024 to July 16, 2029. Gulf LNG is owned 50% by Kinder Morgan, 30% by private equity giant Blackstone Inc, 16% by Warburg Pincus and Kelso & Co, and 4% by Chatham Asset Management. The extension request should be denied, because Gulf LNG has not made good faith efforts to construct the facility since obtaining Commission approval in 2019. Indeed, the February 22 request repeatedly uses language to condition progress as incomplete:

  • The request notes that Gulf LNG has “almost all required federal, state and local authorizations and permits related to construction” [at page 2, emphasis added]. Why doesn’t Gulf LNG have all required permits? Which required permits has it failed to obtain?
  • The request briefly explains the lengthy counterparty litigation that it claims has tied up progress, writing that Gulf LNG has “an expectation that it will be resolved this year” [at page 2, emphasis added]. An expectation is not definitive. If this litigation is indeed an impediment, then Gulf LNG should have made its extension request when the litigation outcome is certain, not an expectation.
  • Revealingly, Gulf LNG states that “[i]n 2023” it “worked with an [Engineering, Procurement and Construction] EPC company” to update engineering and cost estimates. This phrasing suggests that Gulf LNG did not begin working on updating its engineering, procurement and construction planning until 2023. If so, why didn’t Gulf LNG begin and complete these updates in 2020, or 2021, or 2022? It appears that Gulf LNG waited until 2023 to begin this crucial work.

Kinder Morgan is also actively seeking to expand its existing LNG export terminal, Elba Island LNG, in Savannah Georgia. Gulf LNG’s request does not mention the challenges of seeking to make significant modifications simultaneously at two different LNG terminals.

Furthermore, we conducted a basic review of Kinder Morgan’s annual reports filed with the U.S. Securities and Exchange Commission, and none appear to mention any progress, action or construction planning of the Gulf LNG terminal.

Given the large number of unresolved issues, lack of progress and difficultly in simultaneously attempting to undergo significant construction activities at two different LNG export terminals, the Gulf LNG extension request should be considered premature and therefore denied.

A .pdf of the filing is available here: GulfLNG