A panel of federal judges has decided to withdraw its decision around a Texas air permit for Sempra Infrastructure’s Port Arthur LNG export project southeast of Houston.
In November, the U.S. Court of Appeals for the Fifth Circuit vacated an air permit granted by the Texas Commission on Environmental Quality (TCEQ). In that decision, the circuit court sided with a local environmental group’s argument that the agency did not mandate the same pollution controls as other Texas projects, including Rio Grande LNG in South Texas.
However, in the court's latest order filed earlier this month, the justices wrote that the question boils down to the interpretation of the state’s environmental statutes, which should be answered by the Texas Supreme Court (No. 22-60556).
“This case turns on whether Rio Grande LNG’s emissions limits” used best available control technology “under Texas law,” the court wrote in the certification order. “If so, then TCEQ should have either applied those limits” to Port Arthur LNG’s permit or explained why “the limits were not technically feasible.”
Sempra reached a final investment decision (FID) on the $13 billion Port Arthur project last year. Construction on the first phase of the 13 million metric tons/year (mmty) project began near the end of 2023 and has been ongoing throughout the latest permit debate.
The company recently reported to FERC that site preparation and groundwork is expected to continue through February, while pilings and other materials are delivered to the work site in Sabine Pass. Sempra is also awaiting a Federal Energy Regulatory Commission decision to allow a 24-hour construction schedule and to increase its on-site workforce.
Following the momentum of its FID on the first phase of Port Arthur, Sempra has reported it was receiving interest from institutional LNG buyers for the second phase. In November, management told analysts the company could possibly reach an FID on the second phase sometime this year.
However, the company is still awaiting a decision from the U.S. Department of Energy (DOE) on a non-free trade agreement export permit for Port Arthur’s second phase. The Biden administration in January directed DOE to pause new federal export permits while it conducts a policy review expected to last through the year.
