Sign of U.S LNG company Cheniere is seen at the registration counter at the International Conference & Exhibition on Liquefied Natural Gas (LNG2019) in Shanghai
A sign of U.S LNG company Cheniere is seen at the registration counter at the International Conference & Exhibition on Liquefied Natural Gas (LNG2019) in Shanghai, China April 1, 2019.

The U.S. Environmental Protection Agency said on Tuesday it has denied a request by leading U.S. LNG firm Cheniere Energy Inc to exempt its gas-fired turbines at its two U.S. Gulf Coast terminals from a hazardous pollution rule.

"Though EPA is denying Cheniere's request for a special subcategory to comply with the turbines rule, the Agency will continue to work with them and with other companies as needed to assure they meet Clean Air Act obligations," EPA spokesperson Tim Carroll said in an email.

Owners and operators of gas turbines had a Sept. 5 deadline to come into compliance with the National Emission Standards for Hazardous Air Pollutants (NESHAP), which has taken effect after an 18-year stay.

NESHAP imposes curbs on emissions of known carcinogens like formaldehyde and benzene from stationary combustion turbines.

Cheniere had asked the Biden administration to exempt the turbines it uses for liquefication at its LNG terminals from limits on emissions of cancer-causing pollutants, including formaldehyde, arguing they would reduce shipments from the top U.S. exporter of liquefied natural gas for an extended period and endanger the country's efforts to ramp up supplies to Europe.

It asked the EPA to create a new subcategory of NESHAP for its turbines, which are mounted on platforms. EPA denied the request, adding that "controlling emissions of formaldehyde is important to protect public health."

Cheniere spokesperson Eben Burnham-Snyder said that while the company "strongly disagrees" with the EPA's decision, "we will work with our state and federal regulators to develop solutions that ensure compliance."

He said the decision may result in "unwarranted expenditures" but coming into full compliance "will not result in a material financial or operational impact" and will not affect its ability to supply LNG to customers and countries around the world."

Gas-powered turbines emit formaldehyde and other dangerous pollutants through a chemical transformation that occurs when methane is superheated.

Around 250 U.S. gas turbines were subject to the rule, according to an EPA list that showed Cheniere is the only LNG company that uses these type of turbines and whose facilities will be affected.

The Houston-based company, which accounts for around 50% of U.S. shipments of the supercooled fuel, told the EPA in a series of emails seen by Reuters this spring that its two LNG facilities in Louisiana and Texas use a unique turbine design that cannot be easily equipped with pollution controls.

Cheniere shares were down $2.72, or 1.7%, at $159.64 in afternoon trade.