Cheniere, regulators reach agreement

(Courtesey of LNGWorldNews.com)

Cheniere Energy’s Sabine Pass LNG has been under the microscope for the past few months after a gas leak at the plant prompted federal regulators to shut down two storage tanks and issue the exporter a corrective action order.

But after a meeting with company leaders in March, the Pipeline and Hazardous Materials Safety Administration has gone back on its original order and agreed to resolve the issue without litigation or administrative action.

According to the terms of the new agreement, executed Friday, Cheniere will work with the agency to identify the root cause of the leak and come up with a repair plan, as well as a way to bring the two tanks safely back online. 

“The consensual agreement now in place is focused on bringing Tank One safely back into service, continuing our root cause analysis, and pursuing a repair plan to bring Tank Three back into service,” said Cheniere spokesman Eben Burnham-Snyder. 

The leak occurred Jan. 22 when liquefied natural gas at a temperature of about minus-260 degrees was released into the space between the inner and outer walls of a major storage tank, exposing the outer wall to temperatures well below its designed capacity and resulting in four distinct cracks that allowed some gas to escape.

On discovering the leak, employees began emptying the tank, roped off the surrounding area to “limit potential ignition sources,” and blocked off a nearby road, according to the original order, issued Feb. 8.

The company reported no injuries or explosions, and other plant operations continued as normal. 

During its investigation, regulators learned of “11 past upsets” at the same tank dating from 2008 to 2016 in which LNG may have splashed over the top of the inner tank into the outer area — a “geyser-type effect,” the order said. 

It said Cheniere couldn’t validate the exact source or amount of leaked LNG, or identify the circumstances that allowed it to escape in the first place.

The order described LNG leaks as “low-frequency, high-consequences events” that “can result in a serious hazard to people and property.”

However, Burnham-Snyder said the company maintains that “there is not — and has not been — a public safety threat” as a result of the incident.

He said the company hopes to continue a “productive relationship and ongoing collaboration” with the agency as it works to ensure the safety of its workers and the community.

Officials said the shutdowns have had no impact on exports.