Tellurian's 27 MMtpa/3.7 bcf/d, two-phase Driftwood LNG export project and associated pipeline, planned for Calcasieu Parish, LA, has dodged at least one imminent bullet. Facing an April 2026 deadline to begin construction, Tellurian applied to the Federal Energy Regulatory Commission (FERC) for permission to extend that deadline for three years in October 2023. At the same time, they applied to the Department of Energy (DOE) for an extension of their non-Free Trade Agreement (FTA) export license. Today, they were able to check off one of those boxes, with the FERC granting the requested three-year extension. Though Tellurian still has 14 months to start construction, they had stated around the time of the extension request that key equipment wouldn't be available until "late 2027," necessitating the action. The DOE, in recent hearings, stated that existing license extension proceedings are not part of the pause announced by the Biden administration, so we expect that Tellurian will be in receipt of that extension as well.
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How Do You Like Me Now? - Who Are the Winners and Losers With Biden's LNG Permitting Pause?
The Biden administration’s recently announced decision to pause further action on new LNG export permits for at least several months sent shockwaves through the industry and shook up expectations regarding which projects will be hurt by — or benefit from — the pause. As we’ll discuss in today’s RBN blog, the decision is likely to put a number of Gulf Coast LNG export projects (one of them a real giant) in limbo, set back a Mexican project that would depend on Permian and Eagle Ford gas, and boost a couple of projects up in Canada. Oh, and there’s this: The pause also may help two avowed enemies of the U.S.: Russia and Iran.
Tired of Waiting for You - U.S. LNG at a Standstill Waiting Out Construction, Regulatory, Legal Delays
Russia’s invasion of Ukraine and Europe’s subsequent pivot away from Russian natural gas caused a huge resurgence in interest in U.S. LNG. That led to nearly 60 MMtpa (7.9 Bcf/d) of new U.S. LNG capacity reaching a final investment decision (FID) in 2022-23. But regulatory delays at the Federal Energy Regulatory Commission (FERC), the Biden administration’s pause on non-free-trade-agreement (non-FTA) export licenses, and legal challenges to the FERC approval process have essentially halted LNG development in the U.S. There are several LNG projects with enough commercial momentum to move forward that are stuck in regulatory or legal limbo, but even projects that have reached FID are not safe from legal challenges. In today’s RBN blog, we conclude our series on LNG delays by looking at recent court rulings and other regulatory issues and their impact on U.S. LNG development.
When the Going Gets Tough, Part 2 - The Halting Progress of U.S. LNG Export Projects
There’s a tough race underway among U.S. LNG developers jockeying for position in the global LNG market. U.S. supply growth has spurred the development of more than two dozen LNG export projects, the bulk of them along the Texas/Louisiana Gulf Coast. But regulatory bottlenecks and deepening oversupply conditions in international markets are creating strong headwinds and slowing the momentum for some of these massive projects, making it harder and harder for them to reach the regulatory and commercial milestones they need to pass before they can progress to the construction phase. That said, several projects have eked out big wins in recent weeks, including Tellurian’s $7.5 billion memorandum of understanding with India’s Petronet LNG Ltd for its Driftwood LNG project, signed just this past weekend, and LNG Ltd.’s 2-MMtpa sales and purchase agreement for its Magnolia LNG, inked early last week. Today, we provide highlights of recent regulatory and commercial developments that are pacing the proposed export capacity additions.
