U.S. energy regulators approved Tellurian’s request to start site preparation work at its proposed $27.5 billion Driftwood LNG export project in Louisiana.
“With FERC’s approval, we are doing some preliminary work on the site,” Tellurian spokeswoman Joi Lecznar said in an email, noting “we have progressed to completing over 27% of our engineering, and we have ordered some equipment in order to prepare for construction.”
Driftwood is designed to produce 27.6 mtpa of LNG or about 3.6 Bcf/d of natural gas. Tellurian has said it plans to start building the liquefaction plant in early 2020 and produce the first LNG from the facility in 2023.
Driftwood is one of about a dozen LNG export projects in North America that said they could decide to build their plants in 2020. Together those plants, which analysts said will not all be built, would produce over 160 mtpa of LNG.
Several of those projects, including Driftwood, had previously said they could make that final investment decision in 2019.
The U.S.-China trade war and a global oversupply of the fuel that caused gas prices in Europe and Asia to fall made it difficult for several LNG developers to sign enough long-term customer agreements this year. Those agreements are needed to secure financing for their billion dollar projects.
Total world demand for LNG reached a record 316 mtpa in 2018 and is projected to soar by around 100 mtpa by 2023, according to the U.S. Energy Information Administration.
Unlike most proposed U.S. LNG export projects that will liquefy gas for a fee, Tellurian is offering customers the opportunity to invest in a full range of services from production to pipelines and liquefaction.
– Reuters and P&GJ staff report