The natural gas export project underway on the upper Texas coast by Golden Pass LNG Terminal LLC will be delayed until the second half of 2025, ExxonMobil CEO Darren Woods confirmed Friday.
The 18 million metric ton/year (mmty) liquefied natural gas project, a joint venture with QatarEnergy, has faced numerous setbacks. The latest hurdle was recently cleared after one contractor, Zachry Holdings Inc., exited the project. Zachry had filed for bankruptcy because of Golden Pass overruns, which upended the construction timeline.
Woods discussed the delay in completing Golden Pass and a host of other items during the second quarter conference call.
With the Zachry settlement, contractors are “in the process of kind of restaffing and getting started back up again,” he said. “Obviously, we're in the very early days of that, so there's still more work to be done.
“And of course, the teams are very focused on getting back to work effectively executing and bringing that project in as quickly as they can and as close to the original schedule as they can.”
The estimate as of Friday is “about a six-month slippage,” Woods said.
“We had anticipated…first LNG in the middle of next year. We now are looking at probably the back end of 2025 for the first LNG.
“That's kind of where the current schedule is. But I would just condition that with the teams just getting back up and running…they have a clear mandate to try to bring that in as effectively as they can. And my expectations are that they will do better than we currently think, but we've got work to do.”
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Big Market Hit?
The delay to the Golden Pass “will remove a fair amount of new supply from the market in a period of intense growth, shifting the surge from 2026 to 2027 and impacting both the global and North American gas markets,” according to analysis from Wood Mackenzie.
“We have revised our forecast start-up for Golden Pass LNG by six months to December 2025,” Wood Mackenzie’s Mark Bononi, principal for North America Gas and LNG Asset Research, said. “Specifically, we have pushed back first exports from Train 1 from June 2025 to December 2025.
“Similarly, we postponed first exports from Train 2 from December 2025 to June 2026, and Train 3 from June 2026 to December 2026 – keeping a six-month window between the start-up of the trains.”
According to Wood Mackenzie, the delay will remove 2.3 mmty of supply growth forecast for 2025, or about 320 MMcf/d of feed gas. It also will remove 5.2 mmty of growth from its forecast for 2026, or 725 MMcf/d if feed gas.
“A full year’s delay (from our previous view), which remains a risk, would result in a decrease of 10 mmty in our global LNG supply forecast for 2026 and a reduction of 5 mmty for 2027,” Bononi said.
“Because of its size, Golden Pass LNG’s deferment could briefly impact global LNG prices and U.S. natural gas production and prices. Depending on the project’s construction, there remains risks of further delays at Golden Pass LNG, and it could signal challenges to other U.S. LNG projects.”
Weighted To Liquids Prices
Regarding global LNG endeavors overall, Woods said ExxonMobil had made a “conscious decision to get weighted on liquid prices.
“Frankly, if you look at the LNG market, and when you're building large LNG projects, you tend to sell those out and sign contracts in advance of the investment, which the market today is linking to oil,” Woods said.
“So we continue to have a desire to lock in a significant portion of those developments so that we've got surety on the sales side of the equation as we bring those projects up.”
Woods said, “my expectation is we'll continue to be weighted” to oil-based LNG contracts, “and we're very comfortable with that…
“If you look at the oil that we're producing today, we're producing more oil than at any time since the merger of Exxon and Mobil” in late 1999. “So that strategy is beginning to manifest itself on our Golden Pass LNG project.”
