CERAWEEK: US DOE extends LNG permit for Delfin, cheers rising exports

The Trump administration on March 10 extended an LNG export permit for the proposed Delfin LNG terminal offshore Louisiana that US Energy Secretary Chris Wright touted as evidence the administration's support for increasing US supplies of the fuel to global markets.

Wright, who signed the five-year extension at the CERAWeek by S&P Global conference in Houston, sought to draw a contrast to the prior administration, which imposed a moratorium on export approvals.

US President Donald Trump announced an end to the permitting freeze upon taking office in January, but the Department of Energy has yet to resume issuing export licenses as the agency works through a proceeding over a study that the Biden administration launched to inform how the agency considers whether such exports are in the public interest.

"We're hoping to pick up the pace," Wright told reporters during a press conference. "There's a lot of challenges for American energy and global energy, and this administration is passionate about increasing the availability of energy, the opportunities for American citizens and national security for our country and our allies abroad."

The extension for Delfin approved March 10 gives the project developer until June 2029 to export its first LNG cargo. The Biden administration in 2024 had delayed a decision on the developer's request on technical grounds, citing a regulatory setback for the project at the US Maritime Administration, the lead agency over Delfin's deepwater port.

The Trump administration has also moved to advance the MARAD regulatory approval.

LNG export permits

The DOE permits at issue authorize LNG exports to countries that lack free trade agreements with the US. The non-FTA approvals are critical because such countries make up most of the global LNG import market.

Wright did not offer a specific timeline for when he expects the DOE to start issuing permits. But the Delfin approval marked the latest in a string of supportive decisions by the agency for the growing US LNG sector. Those include a conditional export permit issued in February for the proposed Commonwealth LNG project, which said LNG exports "are likely to yield economic benefits to the United States, diversify global LNG supplies, and improve energy security for US allies and trading partners over the course of the export term."

Wright in a speech criticized the LNG permitting pause, telling global energy leaders gathered at the conference he's "been honored to play a role in reversing what I believe has been very poor direction in energy policy."

Speaking later to reporters, Wright also discussed the DOE's approach to resuming the non-FTA approvals. After Trump took office, the DOE extended a public comment period for the Biden-era LNG study to March 20 – a move generally supported by LNG industry participants who want to ensure the durability of approvals against potential legal challenges.

"We want to hear the inputs," Wright said. "We want that back and forth. We want to challenge conclusions and then get to what's the most reasonable conclusions we can draw from this work and study, run that process and then issue final permit approvals based on a full vetting of the facts."

Wright criticized the prior administration's characterization of the LNG study.

"You probably saw a letter released by my predecessor saying this is going to drive up prices and be destructive for the US economy and maybe not even a positive for climate change," Wright said. "If you actually read the report itself, it didn't draw those conclusions at all -- a very funny disconnect between the summary that was released publicly and the actual data in the report."

One piece

Delfin declined to comment.

The developer is targeting a final investment decision on the first of four floating LNG vessels, each with a nearly 3.3 million mt/year nameplate capacity. In seeking the extension, Delfin pointed to long-term deals it has secured with five LNG offtakers for a total 3.3 million mt/year of supply and "additional volumes in advanced commercial negotiations."

Regulatory challenges are not the only obstacles that US LNG developers face. Trade tensions and rising construction costs loom large for project developers, who typically need to sign long-term contracts for most of their LNG production to secure financing.

"Having regulatory certainty again in America is fantastic," Jack Fusco, CEO of Cheniere, the biggest US LNG exporter, said during a panel at the conference. "We're finally back and headed in that direction where we have a regulatory regime that's transparent and fair and hopefully will hold up in the world of law."

But Fusco said "that's one piece of the puzzle" – saying projects still need to build sufficient commercial support, secure financing, and "make sense from an inflationary perspective on building" in order to advance to construction.

During Trump's first term, a trade conflict with China slowed commercial talks supporting US LNG export projects.

Speaking to reporters, Wright downplayed the potential impact of tariffs on developing major energy infrastructure such as LNG export terminals and acknowledged "vigorous debates about tariffs" within the administration.

"Too early to say on tariffs," Wright said. "But I feel quite confident having a smart businessman every day working for America writ large – not an interest group or a particular industry. I'm pretty optimistic about the outcome."