Sempra Infrastructure, a unit of Sempra, said it is continuing construction on the first phase of its Port Arthur LNG export project under existing permits after a US court vacated the project’s emissions permit.
The US Court of Appeals for the Fifth Circuit said in a decision dated November 14 that the Texas Commission on Environmental Quality (TCEQ) declined to impose certain emissions limits on Port Arthur LNG that it had recently imposed on another such facility, Next Decade’s Rio Grande LNG.
“In doing so, it contravened its policy of adhering to previously imposed emissions limits, but it did not adequately explain why. It therefore acted arbitrarily and capriciously under Texas law,” it said.
“Accordingly, we vacate Commission’s order granting the emissions permit at issue and remand for proceedings consistent with our opinion,” the order said.
A spokeswoman for Sempra Infrastructure told LNG Prime in an emailed statement that the company is reviewing the decision and any potential impacts it may have to the Port Arthur LNG project.
“We are continuing construction on the project under existing permits and remain committed to working with the Texas Commission on Environmental Quality and other stakeholders and are evaluating our next steps,” the spokeswoman said.
Sempra Infrastructure took a final investment decision on March 20 for the first phase of the project in Texas worth about $13 billion.
Also, the company won regulatory approval from the US FERC for the second phase of the project.
The first phase of the Port Arthur LNG project includes two trains with a total capacity of about 13 million tonnes per annum and two storage tanks with a capacity of 160,000 cbm.
The development of the proposed Phase 2 project could increase the total liquefaction capacity of the facility from some 13 mtpa to about 26 mtpa.
Sempra Infrastructure recently also completed the sale of a 42 percent non-controlling interest in its Port Arthur LNG Phase 1 project to compatriot private equity firm KKR.
Sempra Infrastructure has a controlling 28 percent indirect interest in Phase 1 at the project level, and ConocoPhillips owns the remaining 30 percent interest.
US engineering and construction giant Bechtel won the EPC contract for the first phase of the project.
Sempra Infrastructure’s unit Port Arthur LNG said in a recent monthly status report filed with FERC that construction-related activities included site clearing, grubbing, stripping, soil stabilization activities, dredging, piling, and maintenance of ECD’s.