Tellurian Inc. has one less permit challenge to its Driftwood LNG project after the U.S. Court of Appeals for the Fifth Circuit on Wednesday denied a petition by environmental groups.

Healthy Gulf and Sierra Club had filed last year a petition for the court to review and possibly vacate a permit issued by the Army Corps of Engineers (No. 22-60397). The plaintiffs argued that the permit issued in 2019 conflicted with sections of the Clean Water Act and deviated from the Corps standard procedure for evaluating disruption to marshland.

In the court’s opinion, Circuit Judge Jerry Smith called objections to the Corps’ review of Tellurian’s dredging plans “wholly meritless” and wrote that the agency had the right to amend its stipulations for environmental mitigation in the...