An Overview of LNG Facility Siting and Licensing

Abstract

The imported LNG (Liquid Natural Gas) is temporarily stored in large tanks at the “base-load” plants. Because of the large quantities of LNG involved and the potential hazards associated with an accidental spill, various federal, state, and local governmental agencies have adopted stringent safety regulations for siting, design, construction, and operation of these facilities. Obtaining numerous required licenses from these regulatory agencies is a lengthy and tedious process. Prior to the issuance of permits to construct and operate an LNG terminal, the project sponsors must demonstrate the need to import natural gas, financial ability to complete the project, the environmental impact of this project, and the risk level to which the public will be exposed by the project. The acceptance of a proposed LNG site by state and federal regulatory agencies is strongly influenced by the various risk levels associated with natural hazards such as earthquakes, landslides, floods, winds, tornadoes, and tsunamis. During the lengthy certification proceedings, a project sponsor is required to develop on the record that the relevant hazards are investigated in depth and the proposed mitigation measures are clearly specified so that responsible decisions regarding siting and design criteria can be made by the appropriate regulatory agency. Prior to commencing the lengthy process of certification, the project sponsor must thoroughly investigate the geological and seismic conditions, as well as population density and other requirements set forth by various local, state, and federal governmental agencies. A slight oversight in meeting any of these requirements could result in extensive regulatory delays or even denial of a permit.