Customs Issues New Guidance On A Range Of LNG Transportation Issues

U.S. Customs and Border Protection recently issued three rulings on multiple facets of the transportation by water of liquified natural gas. All three rulings addressed how the U.S. Jones Act, which is a set of U.S. laws restricting U.S. domestic maritime commerce to qualified U.S.-flag vessels, applies to LNG transportation. These rulings also have the potential to affect LNG exports.

SHIPMENT OF U.S. GAS THROUGH MEXICO BACK TO THE U.S.

The Jones Act encompasses the transportation "by land and water" between two "points in the United States." Thus, a qualified U.S.-flag vessel must be used to transport merchandise from the United States when it moves in part over land through Mexico or Canada back to the United States for shipment by vessel to another U.S. port. For example, crude oil shipped by pipeline from the U.S. to Canada and then by tank vessel to a U.S. refinery would have to be transported by a qualified U.S.-flag vessel from the Canadian port to the