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Cameron LNG Seeks Extension for Expansion After Engie’s Exit
A Sempra Energy affiliate has asked FERC for a six-year extension to finish an expansion at the Cameron liquefied natural gas (LNG) export facility in Louisiana, citing a shakeup among its joint venture (JV) partners that has pushed back the project’s timeline.
The expansion, which would add two more liquefaction trains, another LNG storage tank and related facilities, was approved by a 2016 Federal Energy Regulatory Commission order requiring the new facilities to be in service this year. The facility’s first train entered service last year, while Train 2 is expected to enter commercial operation this quarter, followed by the third train in 3Q2020.
The expansion would boost overall sendout to 1.29 Tcf/year, by expanding capacity by 515 Bcf annually.
In its request, Cameron LNG LLC said that after Total SA in 2018 acquired French utility Engie SA’s interest in the JV, it slowed things down. Cameron said Engie had objected to investing in the expansion, but Total later signed a memorandum of understanding to advance the project.
“While the change in upstream ownership and related diligence efforts has pushed back the development timeline initially projected for the Cameron LNG Expansion Project, Cameron LNG and the partners have progressed development activities and commercial discussions in furtherance of obtaining the required unanimous consent to move forward with the project,” the company said in its request.
The other JV partners include Japanese trading houses Mitsui & Co. and Mitsubishi Corp., along with the shipping firm Nippon Yusen Kabushiki Kaisha. Cameron operates under a tolling model in which it liquefies natural gas purchased by partners who then sell it.
The delay comes at a time when LNG prices are falling on an abundance of spare liquefaction capacity and excess global supplies, which could make it difficult for some new U.S. expansions and export terminals to move forward.
Cameron said it has “proceeded diligently to enter contractual arrangements” since the expansion was approved in 2016. An in-service extension, the company said, would allow it to finish that process.
A final investment decision for the additional liquefaction units and other infrastructure is expected by mid-2021. Construction of the expansion could then take up to five years and put the new facilities on track to enter service in 2026, Cameron said.
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