Federal regulators uphold 3-year extension for Tellurian to build Drifwood LNG plant (updated)
09/07/2024 17:21
(Adds additional information from FERC filing and background in
paragraphs 3-8)
HOUSTON, July 9 (Reuters) - U.S federal regulators
upheld on Tuesday an earlier decision to allow liquefied
natural gas developer Tellurian TELL.A a three-year extension
to construct its Driftwood LNG plant on the west bank of the
Calcasieu river, near Lake Charles, Louisiana.
The United States is the world's largest exporter of the
super-chilled gas and Tellurian is one of dozens of U.S.
companies trying to develop LNG export facilities.
Tellurian has spent years and hundreds of millions of
dollars trying to finance and build the 27.6 million metric ton
per annum (mtpa) LNG export facility and only recently sold its
upstream asset to Aethon Energy to pay off long-term debt.
As part of the sale, Aethon signed a preliminary deal to
purchase 2 million tons per annum of LNG from Tellurian's
Driftwood LNG plant when the proposed project's first phase is
completed.
U.S. regulators denied environmental group Sierra Club's
request for a rehearing of the extension approval, saying the
Commission was not revisiting the authorization, but only
changing the applicable deadline.
Federal regulators did not agree with the Sierra Club's
argument that a pause by the Biden administration on its
authorizations of LNG exports to some countries should apply to
its decision to grant a construction extension since Driftwood
already has a license to export LNG to so called non-FTA
countries.
"Accordingly, DOE’s temporary pause on its authorization of
LNG exports to certain nations does not alter the Commission’s
good cause analysis here," the Commision said.
FERC said good reasons existed for Driftwood's construction
extension request as Driftwood took regular action before the
Commission to advance construction, and received authorizations
from Commission staff to conduct construction activities.
(Reporting by Curtis Williams in Houston; Editing by Emelia
Sithole-Matarise)
((Curtis.Williams@thomsonreuters.com; +1 346 324 7560;))