Tellurian Asks For Three-Year Extension To Complete Its Driftwood LNG Facility

Tellurian has applied for a three-year construction permit extension with the Federal Energy Regulatory Authority to complete the construction of the Driftwood LNG facility.

The Driftwood LNG plant, currently under construction, would be one of the biggest in the world, with a capacity of up to 27.6 million tons of liquefied natural gas annually. The price tag of the project is $25 billion at the moment.

The reason for the extension request is that construction appears to be moving forward more slowly than expected. Tellurian said it would only receive key equipment for the first phase of the plant in 2027 and further equipment for the second phase of development in 2029, which would push the launch date for the facility to 2029 as well.

In all, Driftwood LNG will comprise five liquefaction trains, with the first phase of development to add 11 million tons of LNG annually to the U.S. total. Earlier this month, Tellurian’s president and chief executive told Petroleum Economist that first production was scheduled for 2027.

"Driftwood LNG is under construction and we are comfortable with the FERC processes and procedures," a spokesperson for the company said, as quoted by Reuters.

Currently, LNG export facilities in the United States have a combined operating capacity under real-world operating conditions of 11.4 billion cubic feet daily, the EIA said in its Annual Energy Outlook 2023 earlier this year.

There is an additional 7.3 billion cubic feet daily of capacity under construction, while a further 18.3 billion cu ft of possible LNG export capacity has received full regulatory approval from the U.S. Department of Energy and the Federal Energy Regulatory Commission but has not yet received a final investment decision.

In the short term, U.S. LNG exports are also expected to increase, from 10.59 billion cubic feet daily last year, when Freeport LNG was shut down after June 2022, to 12.07 billion cubic feet daily this year, and to 12.73 billion cubic feet daily in 2024, per the Energy Information Administration.

By Irina Slav for Oilprice.com

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