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Environmental campaigners have penned a letter urging Japan’s export credit agency Nippon Export and Investment Insurance (Nexi) to deny coverage for a liquified natural gas (LNG) facility expansion in the US.

In June, Friends of the Earth wrote to Nexi to “strongly discourage” the agency from supporting upgrades to the Cameron LNG export terminal in Louisiana, warning the development would drive up greenhouse gas emissions and cause harm to nearby residents, the local wetlands habitat and wildlife.

Nexi could not be reached by GTR for comment but a May 19 notice on the export credit agency’s website shows it is currently screening the project and says it is located near a “sensitive area” under its environmental guidelines.

The facility is currently comprised of three LNG trains and exports 12 million tonnes of the gas globally each year.  The phase 2 development, which is still awaiting a final investment decision, would add 6 million tonnes of capacity.

In addition, there are plans to develop a carbon capture and storage (CCS) unit to remove, process and transport the greenhouse gas via pipeline from the Cameron LNG site to an injection well 10km away.

US energy firm Sempra holds a majority stake in the project alongside TotalEnergies, Mitsui & Co., Mitsubishi Corporation and NYK.

In its letter, Friends of the Earth warns the site is polluting the nearby Calcasieu River and “making it unsafe” for local fishermen to harvest their shrimp, oysters and fish, while a boom in LNG projects in the small corner of Louisiana where the Cameron LNG facility is located – with 10 plants already built or planned – is concerning for the habitat.

“Wetlands throughout Southwest Louisiana are the natural barrier that protects people inland from storm surges and flooding. But the construction of Cameron LNG and their proposed CCS and gas storage projects, as well as the other industry being built along the coast are destroying the very wetlands that protect the region during storms,” it says.

Friends of the Earth also claims that pre-existing emissions and accidental leakage issues have plagued the project, arguing the export terminal “regularly exceeds its air permit allowances” and emits “large quantities” of benzene, methane, nitrogen oxide and other pollutants.

“Cameron LNG has had 67 accidental releases since export operations began – averaging nearly 2 accidents per month,” it adds.

In 2014, Nexi covered a US$2.5bn project finance loan from the Japan Bank for International Cooperation (JBIC) and a group of commercial lenders backing the initial construction of the Cameron LNG terminal. At the time, JBIC said the deal would help secure a “stable supply” of energy for the Asian country.

Policymakers are increasingly having to balance climate and energy security concerns, with Europe’s pivot away from Russian pipeline imports – in the wake of the Ukraine invasion – helping drive up gas prices to record highs in August 2022.

Surging costs were felt acutely in Japan, which overtook China as the world’s largest importer of LNG in 2022, though it is hoped a push by Tokyo to bolster nuclear capacity will reduce its dependency on gas in the long term.

Conversely, the US has profited immensely from booming LNG prices and thanks to a push to strengthen domestic liquefaction capacity in recent years is set to regain its crown as the top exporter of LNG globally in 2023, overtaking both Australia and Qatar.

Climate campaigners have called for ECAs party to the OECD Arrangement on Officially Supported Export Credits, a gentleman’s agreement which includes Japan and the US, to formally rule out support for all fossil fuel transactions, having already introduced a ban on unabated thermal coal in 2021.

ECAs such as those in Canada, the UK and several in the EU have individually halted involvement in fossil fuel-related transactions, yet activists say some agencies are rowing back on climate commitments.

As reported by GTR in March, Italy signed up to a pledge to end public financing of fossil fuels by the end of 2022 but has since delayed a decision to put an end date on its backing for the gas sector. The US has also indicated it will continue supporting LNG.

Sempra could not be reached for comment when contacted by GTR.