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Marcellus Drilling News: New Fortress Energy Reapplying For Wyalusing LNG Natural Gas Plant Permits In Bradford County

On March 14, Marcellus Drilling News reported New Fortress Energy intends to apply for updated permits for its proposed Wyalusing LNG natural gas plant in Bradford County, according to statements in a March 10 SEC company filing.

In a March 2022 voluntary settlement of an Environmental Hearing Board appeal of the air quality permit for the proposed facility, the developers of the LNG plant and DEP agreed a new air quality permit would be needed for continued development of the facility. Read more here.

The company’s SEC statement said, “We intend to apply for updated permits for the Pennsylvania Facility with the aim of obtaining these permits to coincide with the commencement of construction activities.”

The company warned, “There is no assurance that we will obtain and maintain these permits and authorizations on favorable terms, or that we will be able to obtain them on a timely basis, and we may not be able to complete our projects, start or continue our operations, recover our investment in our projects and may be subject to financial penalties or termination under our customer and other agreements, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.”

“We operate in the highly competitive industry for LNG and face intense competition from independent, technology-driven companies as well as from both major and other independent oil and natural gas companies and utilities, in the various markets in which we operate and many of which have been in operation longer than us.

“Various factors relating to competition may prevent us from entering into new or replacement customer contracts on economically comparable terms to existing customer contracts, or at all, including , among others:

-- Increases in worldwide LNG production capacity and availability of LNG for market supply;

-- Decreases in the price of LNG; and

-- Displacement of LNG or fossil fuels more broadly by alternate fuels or energy sources or technologies (including but not limited to nuclear, wind, solar, biofuels and batteries) in locations where access to these energy sources is not currently available or prevalent.”

“In addition, we may not be able to successfully execute on our strategy to supply our existing and future customers with LNG produced primarily at our own liquefaction facilities upon completion of the Pennsylvania Facility or through our Fast LNG solution.

“Various competitors have and are developing LNG facilities in other markets, which will compete with our LNG facilities, including our Fast LNG solution.

“Some of these competitors have longer operating histories, more development experience, greater name recognition, larger staffs, larger and more versatile fleets, and substantially greater financial, technical and marketing resources than we currently possess. We also face competition for the contractors needed to build our facilities and skilled employees.”

“As of December 31, 2022, we have spent approximately $128.6 million to develop the Pennsylvania Facility. Approximately $22.5 of construction and development costs have been expensed as we have not issued a final notice to proceed to our engineering procurement and construction contractors.”

The Wyalusing LNG facility will cost an estimated $800 million to build.

Click Here for a copy of the company’s SEC statement.

LNG Transportation/Export Facility

According to a federal court filing, the U.S. Department of Transportation is set to miss the March 13 deadline to suspend a federal regulation that allows liquefied natural gas (LNG) to be transported by rail nationwide.

This will be the third time that the Pipeline and Hazardous Materials Safety Administration, an agency within DOT, has missed this deadline.

The initial suspension of the LNG-by-rail rule was expected in June 2022, then December 2022, and now March 13, 2023.

Along with missing its March 13th deadline to suspend the LNG-by-rail rule, DOT has also indicated in the court filing that it will not make its own March 20th deadline to propose a replacement regulation.

The current rule allows transport of LNG-by-rail across the nation, including for a New Fortress Energy proposal to ship LNG-by-rail from Wyalusing, Bradford County nearly 200 miles south to an export terminal in Gibbstown, NJ.

If the project is approved, it would result in two 100-car trains of LNG moving through dozens of communities, including the City of Philadelphia, daily.