FRAUDWATER ENERGY

In a landmark shift in FERC policy, new LNG terminals will be granted import provisions under Section 3 of the Natural Gas Act rather than under the certificate requirements of Section 7 (c). Instead of being considered facilities for interstate commerce, the new facilities will be deemed gas supply facilities and thus will not be subject to cost-based rates and open access bidding requirements. Under the new policy, developers will be able to import supplies for their own use and marketers will be able to contract privately for terminal services at market-based rates. This new policy from the FERC eases the regulatory approval process.