The developers of a proposed liquefied natural gas (LNG) terminal in Lake Charles, LA, have asked federal regulators for a five-year construction extension, citing a “complex international merger” that required re-evaluating the project and negotiating project agreements.
In a letter sent to FERC last week, Energy Transfer LP (ET) said Lake Charles LNG partner Royal Dutch Shell plc had to implement a new project framework after buying out BG Group plc three years ago. The final investment decision (FID) is expected by the end of 2020, but a precondition is that all initial authorizations by the Federal Energy Regulatory Commission remain in effect.
The project remains “an active, fully supported project with no changes proposed to the scope or design,” which FERC approved in December 2015, ET said. However, the construction deadline extensions to December 2025 are necessary to complete the 16.45 million metric tons/year (mmty) project.
“Due to the large scale of the LNG export terminal facilities, it is anticipated that the construction of these facilities will take 52-56 months to complete, with construction commencing immediately following FID,” ET said.
If the project is sanctioned, subsidiaries of ET and Shell each would own 50% of Lake Charles LNG Export Co. LLC and each could subscribe for one-half of the capacity. Under the original project approved by FERC in 2015, BG subsidiaries were to subscribe for 100% of capacity, while ET would have full ownership.
During 2Q2019, the partners executed engineering, procurement and contracting for front-end engineering design. More than $300 million has been spent to date, with about $150 million still to be spent before a decision is made to sanction the project, according to ET.
In related news, Freeport LNG said Tuesday Total SA has completed its takeover of Toshiba Corp.’s LNG portfolio, including a 20-year, 2.2 mmty tolling agreement that would begin once the third liquefaction train begins commercial operations. Production at the Quintana Island, TX, facility began in August, with the first train set to begin operation later this month.
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