Speaking to attendees at Hart Energy’s North American LNG Exports Conference, Jon Wellinghoff, immediate past chairman of the Federal Energy Regulatory Commission (FERC), offered advice to LNG project developers.
“If you are interested in getting your project through that [FERC] process as quickly as possible, it’s incumbent upon you to do everything correctly before you get to the preapplication stage. You want to ensure you have all of your papers laid out, all of your prestudies done so that ultimately the entities that FERC hires, the independents who do the studies for FERC, basically ratify the studies that you [project developers] have done.”
Wellinghoff recommended going into pre-filing with the project’s office and laying everything out, working through all the questions, through all problems. The process can be accelerated in many instances, he said.
Working with lawyers who know the FERC is helpful, he said. “Find someone who knows the projects office very well. Make sure that you have a premeeting prior to your filing with each one of the FERC commissioners and the chairman.
“It is essential that you sit down with them and go over your project in detail. Go over your time line—What is your financing? What is your projected point to final production? Where do you want to be? How do you want to get there?—and how can they help you get there?
“If you do that, they will help you; bring them into the process. A lot of people make that big mistake of not doing that. Because the day you file that application, it’s ex parte, then you will be prohibited from speaking with any of the commissioners or anyone at FERC other than the project’s office staff who may ask you about more project details.”
He encouraged project developers to study LNG demand statistics. How much supply will there be? He showed a graph that after 2016, LNG supply will exceed demand. “If you’re a commissioner at FERC, [you may ask] do we need to be spending time and money doing this?” he asked.
Ultimately, the developer must be ready to make the case, he said.
“Get all your ducks in a row in your preapplication and sit down with each commissioner and explain it to them,” he said. “If you can’t explain it to them in a way that’s convincing and compelling, then go home.”
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