Pipeline to supply Tellurian's Driftwood LNG project clears environmental review

Tellurian's proposed 37-mile Driftwood Pipeline natural gas transportation project cleared a draft environmental review by the Federal Energy Regulatory Commission, advancing toward a key permit for construction.

FERC staff determined in a May 13 draft environmental impact statement that the project would result in some "adverse environmental impacts" but that those would not be significant with recommended mitigation measures. The permitting review stopped short of drawing conclusions about the potential climate impacts of the project.

The Line 200 and Line 300 project, which would supply gas to Tellurian's proposed Driftwood LNG terminal in Louisiana, would involve dual 42-inch diameter pipelines and a 211,200-horsepower electric compressor station. The project would have a nominal gas transportation capacity of 5.4 Bcf/d and a seasonal peak capacity of up to 5.7 Bcf/d. It would originate at an existing Texas Eastern Transmission compressor station east of Ragley, Louisiana. It would interconnect with existing and proposed gathering, intrastate and interstate pipelines along the route and bring gas to a delivery point at the Driftwood LNG facility just south of Lake Charles, Louisiana, near Carlyss in Calcasieu Parish, according to a resource report filed by Driftwood.

Tellurian has secured enough commercial support to reach a final investment decision on Driftwood LNG and is now in financing talks. The developer said March 28 that it gave the go-ahead to its contractor to start limited construction of the first phase of the LNG project. The initial work will include site preparation, laying foundations, and manufacturing two of the natural gas turbines, Tellurian said.

FERC staff's approach in the Driftwood pipeline review was consistent with other recent pipeline cases following a decision by the commission's Democratic majority in March to suspend an overhaul of the agency's pipeline permitting policy and revisit it after seeking more public comment. The policy changes had called on FERC to take a harder look at the need for projects and at their impacts on climate, among other revisions. But the policies drew intense pushback from lawmakers and industry officials, including Charif Souki, Tellurian executive chairman and founder.

Souki said in an interview at the CERAWeek by S&P Global energy conference in Houston in March that failing to get a permit for the pipeline project would not affect the prospects of the LNG terminal getting built. But the pipeline would improve the overall environmental footprint of the project, Souki said.

"It would help emissions because we decided to do it with electric drives instead of compression," Souki said in an interview at the conference. "We are trying to do the right thing, but if they won't let us, so be it."