Cheniere Asks Regulators for 18 Months to Upgrade LNG Turbines

(Reuters) — Top U.S. LNG exporter Cheniere Energy Inc. is asking Louisiana regulators for 18 months to upgrade nearly half of its turbines in the state because they exceeded new air pollution limits, according to a document viewed by Reuters.

The request reveals a potential snag at a critical LNG production facility as U.S. producers try to ramp up exports to meet booming global demand. This year, the U.S. government denied Cheniere a waiver from rules limiting emissions of possible carcinogens. The company had argued that such repairs could slow U.S. shipments to Europe.

The repair work will not have a material impact on the company's finances or operations, Cheniere spokesperson Eben Burnham-Snyder said in an email. He did not offer a cost estimate for the upgrades, some of which have already been made.

The turbines, which mostly compress and cool natural gas into a liquid, exceeded formaldehyde limits under the National Emissions Standards for Hazardous Air Pollutants (NESHAP), according to testing data.

NESHAP imposes curbs on emissions of carcinogens like formaldehyde and benzene. Cheniere is one of only two LNG providers with turbines subject to the rule, according to U.S. Environmental Protection Agency (EPA) data.

Maas Hinz, Cheniere's general manager of its Sabine Pass, Louisiana, plant, wrote that 21 of the facility's 44 turbines had exceeded the emissions limits in preliminary tests, according to an Oct. 12 letter to the Louisiana Department of Environmental Quality's (LDEQ) enforcement division. He asked the state for 18 months to make changes to and retest the turbines.

The state agency, which is charged with enforcing the NESHAP rule, was closed on Tuesday. The EPA was not immediately available to comment.

Cheniere has proposed a two-phase approach: The first would last 90 days and involve retesting following the replacement of some turbine combustion and metering components. A second would require "a longer-term engineering and operational analysis process," Cheniere said, that could result in replacing existing turbines with a different technology.

Cheniere expects the work to be completed, and all turbines to comply with the federal standards, by April, 2024, the letter said.

In the meantime, the company said it would take steps to minimize formaldehyde emissions, including taking a turbine offline or replacing components.

Sabine Pass LNG is conducting regular maintenance next year that will offer opportunities to make repairs if necessary, Burnham-Snyder said.

"We continue to believe emissions from our turbines are not a threat to the environment or the health of our workers or our communities," Burnham-Snyder said, noting more half passed initial testing.

The company's overall production next year will be slightly higher than this year as an expansion at Sabine Pass is offset somewhat by the maintenance outages, the company has said.

Its Corpus Christi, Texas facility is unaffected. In September, Cheniere submitted test results to Texas regulators that showed formaldehyde emissions at that facility were well below the EPA threshold.

Cheniere has big plans to expand the Texas and Louisiana plants in coming years. The company last week reported $8.85 billion in revenue for the third quarter, more than double the year-earlier period on sharply higher volumes and prices for its product.

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