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Freeport LNG asks FERC for extension as contractor sticks to timeline

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Freeport LNG asks FERC for extension as contractor sticks to timeline

Freeport LNG Development LP asked the Federal Energy Regulatory Commission for an extension to complete its natural gas export terminal in Texas with a May 23 filing that came just a day after a Sempra Energy subsidiary made a similar request for the Cameron LNG facility in Louisiana.

Both export projects are being built by construction contractor McDermott International Inc., which has faced several construction delays on the two facilities. McDermott released statements that coincided with the filings to reaffirm the production schedules the company provided during an April 29 conference call with investors.

The schedule McDermott provided for Freeport was in line with the most recent timeline given by the developer, which expected initial production from the first train in the third quarter. Production from the second train was expected to start in the fourth quarter, while production from the third train was expected in the first quarter of 2020.

Freeport reaffirmed a consistent timeline on May 16, when FERC authorized an application to expand the terminal with a fourth train. Freeport LNG said in the latest filing that the second and third trains are scheduled to be placed in service in the first quarter and second quarter of 2020, respectively. The original project had previously been delayed about nine months from an earlier target, a development attributed in part to flooding following Hurricane Harvey in 2017 and to contractor execution delays.

Freeport LNG told FERC it was making the May 23 request because the commission's July 2014 order that authorized the project required the facility in Brazoria County, Texas, to be made available for service within five years of the date of the order. Freeport asked for an 11-month extension to June 30, 2020.

The project will be able to produce about 15.3 million tonnes per annum of LNG once the first three trains are in service. The fourth train is expected to add 5.1 mtpa of liquefaction capacity. Freeport LNG CEO Michael Smith said in March that the facilities could be ready to ship its first export cargo in July before beginning commercial deliveries in September.

The timeline McDermott had provided for Cameron LNG in April amounted to a delay. The contractor said it expected the startup of the second and third liquefaction trains in 2020, months later than a previous target.

Cameron LNG began liquefaction from the first train earlier in May and is expected to soon begin shipping commissioning cargoes to world markets. (FERC dockets CP12-509, CP12-29 and CP13-25)

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