Annova LNG Terminal

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Annova LNG Terminal was a proposed LNG terminal in Texas, United States which was cancelled in March 2021.

Location

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Project Details

• Owner: Annova LNG
• Parent: Exelon Corporation, Enbridge, Kiewit Corporation, Black & Veatch Holding Company
• Location: Brownsville, Texas, United States
• Coordinates: 25.950835, -97.410844 (approximate)
• Capacity: 6.5 mtpa (1.08 mtpa per train)
• Trains: 6
• Status: Cancelled
• Cost: US$3 billion
• Type: Export
• Start Year: 2025

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Annova LNG Terminal was a proposed LNG terminal in Texas, United States. It was to have featured six production trains.

In 2015, the project went through front-end engineering design, and the project was submitted to the Federal Energy Regulatory Commission (FERC) for approval. If approved, a decision on whether or not to construct the facility is expected in 2018. After a final investment decision dependent on FERC authorization, all local, state, and federal permitting, and customer commitments, equipment purchase orders and construction would begin.

Project planning is ongoing. In May of 2016, Annova LNG announced their plans to slightly relocate the planned LNG to accommodate a wildlife-crossing culvert under Highway 48, a corridor used by endangered ocelots. In early 2017, FERC requested that Annova LNG evaluate potential threats regarding the proposed LNG facility's proximity to SpaceX's planned Boca Chica Beach launch pad facility.

In April of 2019, FERC released its final environmental impact statement on the project, which was mostly favorable, claiming that although the project stands to cause harm to the local environment, most of it would be reduced through Annova's proposed mitigation plan. The statement cited possible "permanent and significant" impacts on three endangered species--the ocelot, the jaguarundi, and the aplomado falcon. The three species will be impacted by traffic, noise pollution, and habitat fragmentation from the project. The project will also inhibit the species' natural movements and migratory patterns.

In December of 2019, FERC issued a formal approval of the project. The Commission also approved, with conditions, the Rio Grande LNG Terminal, the Texas LNG Terminal, and the Rio Bravo Gas Pipeline, bringing the total number of FERC-approved projects in 2019 to eleven. The Rio Grande LNG Terminal and the associated Rio Bravo Gas Pipeline will export 27 million metric tons of natural gas per year. The Annova LNG Brownsville Project would export up to 6 million metric tons per year. All four LNG project sponsors have applications pending before the U.S. Department of Energy seeking authorization to export gas to countries without Free Trade Agreements with the United States.

In February 2020, the terminal received approval from the US Department of Energy (DOE) to export to non-free trade agreement countries. DOE authorized export of about 360 bcf/year, Annova’s optimal production capacity.

In April 2020, Annova LNG received permission from the Texas Commission on Environmental Quality (TCEQ) to build the terminal, which will deliver gas via the Aqua Dulce hub. Annova said that the air permit from TCEQ was one of the final permits necessary to begin construction of the export facility, and that they intend to start construction sometime in 2021. The energy and shipping brokerage Poten & Partners also disclosed that the final investment decision (FID) for the terminal had been delayed beyond the original FID timing of the second quarter of 2020. It cited COVID-19, plunging demand and the crash in oil prices as the reasons for the delay.

Cancellation

On March 22, 2021, Annova LNG announced that it had abandoned its plans for the export terminal after filing a request with FERC to withdraw its certificate. Speaking with S&P Global, a spokesman for Exelon Corporation said that the decision had been taken after the company had failed to find a "suitable offer" to sell its majority stake in the project, and that cancelling the project "better financially positions Exelon's generation business going forward". After more than six years of development, Annova LNG had not been able to announce any long-term offtake contracts, and had been unable to reach a final investment decision.

Reacting to the news, Bekah Hinojosa, Gulf Coast Campaign representative of the Sierra Club which had filed lawsuits against the project's development, said: "Today's victory is the result of six years of tireless efforts of the Rio Grande Valley communities in South Texas who have written comments, attended hearings, protested banks, and more to protect their health, their precious coastline and the climate from Annova LNG's proposed fracked gas project. No LNG export terminal has any place in our communities or our energy future, and today's news is a step in the right direction to putting an end to exporting fracked gas across the world."

Ownership

In February 2020, Enbridge bought a 10.5 percent stake in the Annova LNG Brownsville Terminal.

Opposition

In April 2020, two environmental groups sued the U.S. Fish and Wildlife Service (FWS). The Sierra Club and Defenders for Wildlife sued the FWS in 5th Circuit U.S. Court of Appeals, asking the court to review whether the agency violated the Endangered Species Act (ESA) when deciding that the planned construction would not threaten the survival of the medium-sized wildcat, thought to number only about 60 specimens in the United States.

Following the 2019 FERC approval, opponents filed new lawsuits against the three proposed LNG terminals and one proposed gas pipeline in Brownsville, Texas, the Annova LNG Brownsville Terminal, the Rio Grande LNG Terminal, the Texas LNG Terminal, and the Rio Bravo Gas Pipeline. The three suits were filed by local residents, the city of Port Isabel and the Sierra Club. Local shrimpers and fishermen filed a suit against Rio Grande LNG and the Rio Bravo Pipeline in the U.S. Fifth Circuit Court of Appeals, challenging the U.S. Army Corps of Engineers approval of a water permit for the plant and pipeline. The plaintiffs argue that the Corps failed to avoid or mitigate negative impacts to wetlands.

In another filing, the city of Port Isabel, the Sierra Club and two grassroots organizations filed two lawsuits challenging the FERC's approval of the Annanova LNG and Texas LNG projects. The suits were filed in the U.S. Court of Appeals for D.C. Circuit in Washington, D.C. The suits are asking that the federal permits be reviewed and overturned by a federal judge. The suits argue that FERC’s socioeconomic and environmental justice studies were flawed, as was FERC’s ruling that the LNG facilities are in the public interest. Those groups have a similar lawsuit filed against FERC’s approval of the Rio Grande LNG and Rio Bravo Pipeline. LNG opponents contend that the LNG facilities in Brownsville would create safety and environmental concerns, impact local fishermen, destroy wetlands, threaten wildlife, and hurt tourism. It would also create air pollution problems in the Rio Grande Valley, an impoverished area largely home to traditionally marginalized communities, disproportionately impacting the Latino community, a potential violation of federal law. Port Isabel, a Brownsville neighbor, is opposed to the LNG project and is also party in a separate lawsuit that is pending in Texas courts.