Eyeing mid-2022 FID, Cheniere seeks extension for Corpus Christi Stage 3

Cheniere Energy has asked the Federal Energy Regulatory Commission for an extension until June 30, 2027, to complete construction and make its 10 million mt/year Corpus Christi Liquefaction Stage 3 project available for service.

The company told the regulator that the "onset and duration" of the COVID-19 pandemic created a drag on commercial progress and slowed a final investment decision and construction in time to meet the current deadline of November 2024.

But with the turnaround in the market, Cheniere expressed optimism about advancing the project in 2022, citing significant growth in global LNG demand and its long-term contracting activity in 2021.

"During the last 12 months alone, Cheniere Energy and its affiliates have signed approximately 6 million mt/year of long-term contracts, which, alongside long-term contracts previously signed, means that commercialization for the Stage 3 Project is close to completion," the company said in its Dec. 7 request (CP18-512).

Market signals

"The strong global LNG market continues to drive commercial momentum, and CCL Stage III anticipates imminently restarting early construction activities at the Stage 3 Project site and making a positive FID during 2022," the company said.

Amid a strong run-up in prices in Asia and Europe, the spread between the Platts LNG FOB Gulf Coast Marker and the Henry Hub has averaged over $14/MMBtu during the past six months, helping restore momentum for commercial contracts.

Based on FID around June 2022 and a five-year construction schedule, equivalent to the construction duration conceived in FERC's November 2019 order, Cheniere anticipated the project would be available for service by June 2027.

Cheniere has previously said it expected to advance the project in 2022, once remaining investment and commercial parameters were met. Cheniere has 15-year supply agreements directly tied to the expansion with US gas producers Apache and EOG Resources and Canadian oil and gas producer Tourmaline that cover a combined total of 2.55 million mt/year.

Contract momentum

Other contracts Cheniere or affiliates have announced this year include a 900,000 mt/year deal extending about 13 years with an affiliate of China's ENN Natural Gas, an 800,000 mt/year agreement with Swiss commodity trader Glencore, and a 1.8 million mt/year deal with Sinochem Group. In November, Cheniere Marketing International also announced a 20-year deal in which Chinese gas distributor Foran Energy will buy around 300,000 mt/year.

Cheniere spokesman Eben Burnham-Snyder Dec. 9 said that the extension request at FERC is a "prudent" step that reflects the recent commercial momentum and which would provide transparency on the timeline for regulators, as well as for partners on the commercial side and in construction. Along with the extension request, the company provided FERC with an updated construction timeline.

FERC on Nov. 22, 2019 approved Corpus Christi Liquefaction Stage III and Corpus Christi Liquefaction to build and operate seven midscale liquefaction trains with a maximum total production capacity of 11.45 million mt/year and one full containment LNG storage tank. In addition, Cheniere Corpus Christi Pipeline gained approval to build and operate a 1.5 Bcf/d, 21-mile pipeline that would link the project to existing pipeline systems.

In 2020, FERC approved early construction steps, including soil stabilization, road improvements and construction of a compressor unit associated with the pipeline, Cheniere noted.