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Frequently Asked Questions

The Excelsior
The Excelsior in drydock.
Courtesy, Excelerate Energy L.L.C.


List of Acronyms

What is LNG?
LNG, or liquefied natural gas, is natural gas in liquid form. Natural gas is cooled to minus 259 degrees Fahrenheit (-161 degrees Celsius) for transport.

What is a deepwater port?
Deepwater ports (DWP) were initially defined in 1974 as non-vessel, fixed or floating manmade structures that are used as ports or terminals for the loading, unloading, or handling of oil for transportation to a state. The 2002 amendment to the Deepwater Port Act (DWPA) expanded this definition to include facilities constructed at sea which are used as terminals to transfer natural gas, usually received in the form of Liquefied Natural Gas (LNG) from LNG carriers to onshore storage facilities and pipelines. In order to receive LNG, specialized port facilities are required. Four such land-based import facilities exist in the continental United States today. Additional import facilities will be needed to accommodate the projected increases in demand for LNG. In light of this, the DWPA was amended to allow for the construction of new LNG port facilities in the waters beyond the U.S. territorial limits.

The term DWP includes all associated components and equipment, including pipelines, pumping stations, service platforms, mooring buoys, and similar features or equipment to the extent they are located seaward of the high water mark.

Who has the authority to issue licenses for deepwater ports?
The authority for the issuance, transfer, amendment, or reinstatement of a license for the construction or maintenance of a deepwater port rests with the U.S. Secretary of Transportation. However, as published in the June 18, 2003 Federal Register, the Secretary delegated this authority to the Administrator of the Maritime Administration (68 FR 36496). The Maritime Administration, acting on behalf of the Secretary, is required to confer with a number of federal agencies and the public, and must also obtain approval from adjacent states. The U.S. Coast Guard, now part of Department of Homeland Security (DHS), has been delegated authority for license processing functions (62 FR 11382) (March 12, 1997) and the Administrator of the Research and Special Programs Administration (RSPA), which is also part of the Department of Transportation, has authority by delegation for the establishment, enforcement, and review of regulations concerning the safe construction, operation, or maintenance of pipelines on Federal Lands or the Outer Continental Shelf (49 CFR ยง1.53(a)(3)).

What is the license granting process and who is involved in it?
Beyond The Maritime Administration, the U.S. Environmental Protection Agency (EPA) and Department of Commerce's National Oceanic and Atmospheric Administration (NOAA) and National Marine Fisheries Service (NMFS) have responsibilities to make recommendations regarding potential impacts of the proposed facilities on the environment in accordance with NEPA regulations, to which the port facilities are subject. The Department of the Interior's (DOI) Fish and Wildlife Services (FWS) is responsible for protecting and conserving migratory birds, endangered species, marine mammals, and interjurisdictional fish. Applicants for Federal licenses are required to consult with the FWS on projects potentially affecting wildlife species and resources. The Maritime Administration, working through DOI's Mineral Management Service (MMS), and the Department of Energy provides insights into the benefits and consequences of the proposed facilities to the nation's energy needs. The U.S. Department of State provides counsel in the reconciliation of safety and environmental requirements with respect to international obligations. The U.S. Coast Guard (USCG) is instrumental in developing the environmental and marine navigation aspects of the decision and in confirming compliance with all environmental regulations as stipulated by NEPA. The Maritime Administration is charged with confirming the ability of the applicant to meet the financial requirements of the DWPA, including the posting of the required bonds, as well as the citizenship requirements. The Maritime Administration has the responsibility to issue the Record of Decision (ROD) and the License. The ROD and License are drafted and negotiated in close cooperation with the USCG. The ROD must be issued within 90 days of the last public hearing, which, by statute, must take place within 240 days after the public has been notified of a complete application for Federal license. The Maritime Administration can stop the clock, with appropriate notification to applicants, to request further information as needed during the application review process.

How/where do companies get information to apply for a DWP license?
The Code of Federal Regulations (CFR) 33 Parts 148, 149, 150 is a temporary interim rule that revises regulations adopted in 1975 to implement the DWPA. The temporary rule streamlines regulations to the natural gas deepwater ports authorized by Congress in the Maritime Security Act of 2002. The document provides specific information including FAQs on submitting applications to own, construct, and operate LNG deepwater ports.
http://dmses.dot.gov/docimages/p77/263781.pdf [PDF, 412KB]

What happens if a company does not accept the conditions specified for the license?
The Secretary may issue a license outright with no special conditions, deny the license, or issue a license subject to certain conditions which may be specified. If the applicant does not like the conditions, it may withdraw its application.

How long does the license-granting process take?
The DWPA mandates that the entire process, from submittal of a complete application to ROD, must be completed within 356 days. The decision that the application is complete must be rendered within 21 days of formal receipt of application documented through a "Notice of Application," with a 5 day period to post the notice in the Federal Register. Once a ROD is issued then the applicant must make the facility fully operational. Estimates for this to be accomplished have ranged from 2 to 4 years.

What are the role of the states?
Adjacent states, acting through their Governors, have a veto power over all DWPA projects. States must also demonstrate compliance with the Coastal Zone Management Act.

How does the public get involved?
The public is informed of the entire process through publications in the Federal Register, as well as the posting of all public documents on the Department of Transportation's Docket Management System. The NEPA process, as well as other Federal statutes (e.g., the Coastal Zone Management Act) also provides for public participation. Each Federal Register notice will indicate opportunities for public involvement. The public is able to participate in the initial scoping meeting to determine which potential impacts are most important to consider during the NEPA process. Following issuance of a draft EIS / EA the public is able to comment as well as attend public hearings. The final environmental report will include response to public and agency comments.

What are the different types of vaporization technologies that are commonly used to process LNG?
Several common types of vaporization commonly used are Open Rack Vaporization (ORV); Submerged Combustion Vaporization (SCV); Intermediate Fluid Vaporization (IFV); and Shell-and-Tube Vaporization (STV).

What is the current and projected need for DWPs?
According to the U.S. Department of Energy (DOE)3, energy consumption in the United States is expected to increase more rapidly than domestic energy production through 2025. Further, natural gas demand is expected to exceed domestic production during this period requiring double the current capacity to import natural gas by 2025. Natural gas can be imported via pipelines from neighboring nations or by ship using specialized LNG carriers. In order to receive LNG, specialized port facilities are required. Currently four such land-based LNG import facilities exist in the continental United States. To meet the expected demand for LNG imports, which are projected by DOE to increase from 0.2 trillion cubic feet in 2002 to 4.8 trillion cubic feet in 2024, several more import facilities or facility expansions will be necessary.

Annual Energy Outlook 2004 Overview (Early Release), Energy Information Administration, Office of Integrated Analysis and Forecasting, U.S. Department of Energy, December 2003.

What is Open Rack Vaporization?
ORV is a type of technology that uses the heat from a continuous supply of processed water to regasify LNG and produce natural gas. For offshore terminals, seawater provides the supply of process water. Seawater at ambient temperature is pumped through a series of heat exchanges, treated with an oxidizer (e.g., sodium hypochlorite) to prevent fouling from marine growth, and is discharged back to the source at a cooler temperature. Vaporization effectiveness depends on seawater temperature, which must be at least 46 degrees F and preferably warmer. This technology produces no combustion-related air emissions except for those related to pumping equipment. Because of the large volumes of water used, protecting the source and receiving waters is essential to the design and use of ORV intake and discharge.

What is Submerged Combustion Vaporization?
SCV is a highly efficient, bath-type vaporization technology where the LNG passes through submerged steel tube bundles. The heat source used to warm the process water comes directly from jetting combustion gases into the bath (with the combustion process fueled by 1.5 to 2.0 percent of the LNG cargo). SCV uses an open flame to heat the process water. In order to neutralize acidic conditions, the water must be treated with a caustic compound, which requires safeguards in transportation, storage, handling, and use. SCV technology requires a considerable amount of space, an open flame, and high fuel usage.

What is Intermediate Fluid Vaporization?
This closed-loop technology uses an antifreeze-type fluid, such as ethylene glycol or propane, referred to as the heat transfer fluid (HTF). Seawater flows through tubes in the bottom of a large boiler to heat the HTF. This fluid passes through a shell-and-tube vaporization unit to regasify the LNG, and then moves to a second heat exchanger where it condenses before being re-boiled. This two heat exchanger arrangement requires a large amount of space.

What is Shell-and-Tube Vaporization?
STV technology uses a natural gas-fired heat exchanger or boiler in which tubes containing LNG pass through a counter-current of heated water or glycol/water. The natural gas to heat the water or glycol/water is extracted from the sendout from the system's vaporizers. The burning of natural gas results in NOx and other air emissions. STVs can also be designed to use seawater as a heat source, in an open-loop system. STVs are suitable for use on floating platforms or ships that lack the stability of a fixed platform.