Cheniere settles Sabine Pass LNG tanks issue with PHMSA

Houston-based Cheniere Energy has settled with a regulator the terms and conditions under which it is allowed to eventually bring back into service two LNG storage tanks that have been shut since leakage in January. 

Following discussions and a hearing with the presiding official of the Pipeline and Hazardous Materials Safety Administration (PHMSA) in March, the parties agreed to resolve the issue without administrative proceedings or litigation.

Responding to an LNG World News email, Cheniere’s spokesman Eben Burnham-Snyder said the company’s goal has been to “safely and quickly address this incident,” noting that it “believes there is not – and has not been – a public safety threat.”

To remind, tank S-103 at the Sabine Pass plant in Louisiana released LNG on January 22 into the space between the inner and outer tank walls, which eventually caused cracks in the outer tank wall and the pooling of LNG in the secondary containment area surrounding the tank.

This resulted in PHMSA ordering Cheniere to shut down operations of tanks 1 and 3. The facility includes five storage tanks with about 3.4 billion cubic feet equivalent capacity, each.

“After further discussion and investigation, PHMSA has terminated its initial order and replaced it with a consent agreement reached between the agency and Cheniere,” Burnham-Snyder said.

PHMSA said in its notice that Cheniere agreed to complete corrective actions which include a plan to analyze the root cause of the failure, a repair and modification plan as well as the plan to return the two tanks into operation. The work plan for both tanks will be reviewed by the PHMSA director who will then either reject, request modification or approve it.

In addition, Cheniere will have to submit monthly reports to the PHMSA that will include all available data and results of the testing and evaluations required under the agreement, describe the progress of the repairs or other remedial actions being undertaken and provide information on all other activities being undertaken.

Burnham-Snyder added that Cheniere is now “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.” 

Currently, four 0.6-Bcfd liquefaction trains operating at Sabine Pass, and a fifth is under construction and expected to enter service in mid-2019.