Downeast Liquefaction LLC has asked FERC to pause proceedings for its proposed liquefied natural gas (LNG) export project in Maine while backers rethink their plans in light of "current market conditions."
According to a prefiling request made last year, the Downeast LNG (DELNG) facility would be able to produce up to 3 million tons per annum (mtpa) of LNG beginning in 2019-2020 (see Daily GPI, July 23, 2014). DELNG last year increased its initial capacity by 1 mtpa due to market interest, said Downeast founder Dean Girdis. Construction was expected to begin in 2016. DELNG said last year it planned to submit free trade agreement (FTA) and non-FTA export requests to the U.S. Department of Energy.
However, the project, which is to be sited in Robbinston, ME, is now on hold until at least Feb. 29 while Downeast and its investors consider their options, according to the latest filing at the Federal Energy Regulatory Commission [PF14-19; CP07-52; CP07-53].
"Given evolving market conditions, specifically low gas prices in Europe and spot LNG prices in Asia, coupled with a projected oversupply of LNG until 2021, Downeast LNG and its investors are evaluating the timing of Downeast LNG supply," Girdis said in an email to NGI. "We believe our terminal is well positioned to monetize trapped and undervalued Northeast Pennsylvania Marcellus gas reserves once LNG supply and demand rebalances."
The group Save Passamaquoddy Bay, a longtime opponent of Downeast, said on its website, "Dean Girdis and company have finally awoken to being perpetually behind the market curve."
If the Downeast export terminal plans are shelved, it won't be the first project to succumb to shrinking spreads for LNG exports (see Daily GPI, Oct. 27; Sept. 3). Earlier this year, BG Group plc deferred a decision on its LNG terminal proposed for Lake Charles, LA (see Daily GPI, Feb. 3), and Excelerate Energy withdrew its FERC applications for a floating LNG export terminal off the Texas coast (see Daily GPI, Sept. 2).