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DOE Streamlines Notification of Changes in Control of Entities Importing or Exporting Natural Gas

Wednesday, November 05, 2014
Sandler, Travis & Rosenberg Trade Report

The Department of Energy has issued a notice setting forth procedures that will apply when applicants to import or export natural gas or those entities that have already received an import or export authorization undergo changes in control. These procedures were applicable beginning Sept. 26, 2014.

Under the Natural Gas Act, no person may import or export natural gas without authorization from DOE, and DOE will approve such imports or exports unless it determines that they are not consistent with the public interest. The NGA provides that exports of natural gas to countries with which the U.S. has entered into a free trade agreement providing for national treatment for trade in natural gas, and all imports of liquefied natural gas from any country, are deemed in the public interest and must be granted without modification or delay.

Under DOE regulations, applicants must amend pending applications whenever there are changes in material facts or conditions upon which the proposal is based. Additionally, authorizations to import or export natural gas are not transferable or assignable unless specifically authorized. DOE has made clear that a change in control of the authorization holder may occur through asset sale or stock transfer or by other means. DOE has also explained that it construes a change in control to mean a change, directly or indirectly, of the power to direct the management or policies of an entity, regardless of how such power is established or exercised.

This document announces new procedures to amend both pending applications and authorizations already issued to reflect changes in control of the proposed or actual importing or exporting entity or entities. These procedures are intended to streamline the process for making these changes without affecting DOE’s ability to make the required public interest determination. DOE notes that these procedures do not affect the existing standard used to determine if a change in control has occurred or will occur.

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