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Energy Transfer units ask FERC for more time on Lake Charles LNG project

Energy Transfer LP subsidiaries asked the Federal Energy Regulatory Commission for a five-year extension to complete its proposed Lake Charles LNG export terminal and related facilities in Louisiana.

In an Aug. 30 letter, Lake Charles LNG Export Co. LLC, Lake Charles LNG Co. LLC and Trunkline Gas Co. LLC requested the commission to give them until Dec. 16, 2025, to complete construction and put the project into service. FERC's December 2015 order that authorized the project required the completion of the pipeline upgrades by Dec. 16, 2019, and the export terminal facilities by Dec. 16, 2020.

Michael Langston, chief regulatory officer of Energy Transfer, wrote that the project "encountered an unforeseen delay in the originally projected construction schedule." After FERC issued its order, Royal Dutch Shell PLC acquired British oil and gas company BG Group PLC, the company contracted for the facility's full capacity, leading to contract renegotiations. The talks ended with a project framework agreement between Energy Transfer and Shell in March, under which each company will own 50% of the project.

"The project sponsors are eager to continue to move forward with the project and receipt of the requested extension is a necessary step," Langston wrote in the letter.

Langston said the developers expect to make a final investment decision on the project as early as the end of 2020. The sponsors have so far spent $300 million on the project and expect to spend another $150 million before a final decision, according to the letter.

The Lake Charles LNG project is designed to convert Energy Transfer's existing LNG import and regasification terminal in Lake Charles, La., to a proposed large-scale LNG export facility with a liquefaction capacity of 16.45 million tonnes per year to export U.S. natural gas to customers abroad. In May, Energy Transfer and Shell invited tenders for an engineering, procurement and construction contract for the project. (FERC dockets CP14-119, CP14-120 and CP14-122)