US liquefaction player Cheniere Energy said this week that it is complying with a federal order to repair two leaky liquefied natural gas storage tanks at the Sabine Pass export facility in Louisiana after regulators chastised the company for failing to meet certain requirements to return the tanks to service.

In a joint letter, the Federal Energy Regulatory Commission (Ferc) and the Pipelines & Hazardous Materials Safety Administration (PHMSA) this week outlined the requirements and said they were not yet ready to authorise a return to service for the tanks, which were taken offline last year after they leaked LNG.

The PHMSA also expressed worry that Cheniere had prematurely prepared one tank for return to service, a concern that was passed on in a phone call in late May, according to the letter.

PHMSA ordered the tanks to be taken offline in February 2018 after workers discovered discovered a leak at Tank S-103 weeks before. The tank is one of five 3.4 billion cubic feet storage tanks at the Sabine Pass site.

Upstream understands that LNG production at the facility has not been substantially affected by the tanks being offline.

In its 2018 order, PHMSA found that super-cooled LNG had made its way into the annulus, or the space between the inner and outer tank walls, which eventually caused cracks in the outer tank wall and "a pooling of LNG" in the secondary containment area surrounding the tank, where it cooled the outer tank wall to "a temperature far below" its design temperature of -31.66 degrees Celsius.

The spill resulted in four separate cracks of one to six feet long.

Further investigation found that another tank, S-101, had also experienced releases of LNG from the inner tank to the annulus and was leaking natural gas vapours at 14 different places along the base of the tank.

Cheniere had fought the order, saying it was unwarranted because the leak did not "substantially or imminently" threaten public safety. However, the company reached a deal with the agency in April 2018 in which it agreed to submit repair plans and continue investigating the leaks.

But more than a year later, Ferc and PHMSA said they have still not received the information or documentation necessary to authorise the tanks to be placed back online.

"Much of the testing, documentation and installation set forth as requirements...has been previously requested by staff members of the Ferc, PHMSA or a combination of both," according to the letter.

"For example, Sabine has failed to comply with prior requests to test the shell and floor plates for Tank S-103 and provide documentation of the testing to both PHMSA and the Ferc... Therefore, at this point, it has become necessary to more formally issue the attached requirements based on your failure to provide the requested items during the course of the post incident process."

Requirements include complete structural re-inspections of all the tanks at the Sabine Pass LNG site and installation of additional leak detection equipment. Cheniere must also provide evidence that the bearing ring, which was found to have cracks caused by "inadequate support" during the repair work on Tank S-103, is now "uniformly supported" to prevent the formation of new cracks. The agencies said information previously provided by Cheniere in a memo was "inadequate".

A Cheniere spokesman said that repair work performed on the tanks thus far has been performed in accordance with plans approved by PHMSA under the requirements of the 2018 order. "We will continue to work with our regulators to safely bring these tanks back to service, after receiving authorisation from PHMSA and Ferc.

"We are analysing the letter from the agencies and will provide a formal response.

"We have been responsive and forthcoming throughout this process, and will continue to be," the spokesman added.

The news comes as US LNG exports are set to soar over the next few years.

The US Energy Information Administration (EIA) expects that US LNG export capacity will increase by almost 50% by the end of 2019 to 6.3 billion cubic feet per day baseload capacity as new trains, including those at Cheniere's Corpus Christi LNG project in Texas, are commissioned.

The increase will make US LNG export capacity the third-largest in the world behind Australia and Qatar, the EIA said in its July Short-Term Energy Outlook.

Cheniere recently took a final investment decision on the sixth train at Sabine Pass, which when completed will bring the project's nominal production capacity to as much as 45 million tonnes per annum.

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Cheniere tank delays criticised