From The Houston Chronicle


Dallas pipeline operator Energy Transfer is asking federal regulators for a five-year extension to build the company’s proposed Lake Charles LNG export terminal.

Energy Transfer received a federal permit for the project in December 2015. Under the terms of that the permit, the 240-acre liquefied natural gas export terminal was supposed be operational by December 2020 but the project never got built.

In a Friday morning letter, Energy Transfer cited complex international contract negotiations for the delay and asked the Federal Energy Regulatory Commission to extend that deadline until December 2025.

“The project sponsors are eager to continue to move forward with the project and receipt of the requested extension is a necessary step,” Energy Transfer Chief Regulatory Officer Michael Langston wrote in the letter.

Lake Charles LNG was originally developed as an import terminal, but that changed when the shale revolution resulted in record production natural gas production in the United States. Under its permit, the proposed export terminal is authorized to produce 16.45 million metric tons of LNG year.

In his letter, Langston wrote that British oil & gas giant BG Group had originally agreed to buy all of the Lake Charles LNG’s production but the company was bought by Dutch oil major Shell.

The $53 billion dollar deal between Shell and BG Group closed in February 2016 but required complex contract renegotiations between Shell and Energy Transfer. Those negotiations ended with Shell and Energy Transfer each owning one half of the proposed export terminal.

In his letter, Langston explained that Energy Transfer is not expected to make a final investment decision on Lake Charles LNG until early 2020 but the project has taken some steps forward. Langston wrote that Energy Transfer has spent $300 million on the project so far and it expected to spend another $150 million before making a final investment decision.

Energy Transfer and Shell invited engineering, construction and procurement companies to bid on the project in March. Although some front-design design and engineering work has been awarded, a general contractor has yet to be selected.


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