Tellurian Inc. has quietly delayed a final investment decision on the Driftwood LNG facility in Louisiana to 2021 with the plant beginning operations in 2024, not in 2023 as had been planned, Kallanish Energy reports.
A final investment decision had been expected later this year.
Full operations would begin at the giant plant near Lake Charles, Louisiana, in 2026 or 2027.
The Texas-based company also said it may defer the construction of its proposed $2.2 billion Permian Global Access Pipeline because there is less drilling in that area of West Texas and New Mexico.
That news came last week from CEO Meg Gentile in an investor presentation she made at the JP Morgan Energy, Power, and Renewables Conference on June 16-17 in New York City, New York.
Those announcements came only in her talk that was webcast and not in any company statements nor in the company’s PowerPoint presentation. The news got limited circulation, although S&P Global Platts filed a report.
On May 31, a memorandum of understanding between India’s Petronet LNG Ltd. and Tellurian Inc. expired and that hurt the project.
The two sides had signed the MOU last September. Last February, it was extended to May 31, 2020.
In the pact, Petronet and its affiliates had agreed to purchase up to 5 million tonnes per year of liquefied natural gas and to acquire a $2.5 billion stake in the LNG liquefaction/export facility.
In recent months, spot prices of LNG delivered to Asia have collapsed, swinging the market in favor of LNG buyers.
Tellurian has Driftwood LNG offtake agreements with Total SA and Vitol.
Last March, Tellurian had laid off 40% of its workforce and restructured in an attempt to cut costs and save the Driftwood LNG project.
There were reports at that time that the Driftwood FID could be delayed 12 to 18 months by Tellurian.
The proposed LNG liquefaction/export facility remains financially viable and ready for construction, it has said.
Driftwood is being designed to produce 27.6 million tons per year of LNG for export. It is one of the largest planned LNG facilities.
The facility, related pipelines, and natural gas assets are expected to cost $29 billion, according to Houston-based Tellurian.
This post appeared first on Kallanish Energy News.