The U.S. Department of Energy (DOE) has denied an Energy Transfer LP affiliate’s request to again extend the deadline for starting exports from its proposed Lake Charles LNG facility in Louisiana.
In an order denying the application for an “unprecedented second extension,” DOE said Friday that the project had failed to show good cause for it. The agency sided with environmental groups that oppose the plant, finding the company’s arguments for the project’s stalled development were generalized.
In a policy statement issued the same day, DOE reaffirmed its expectations that LNG projects should be able to start exporting the super-chilled fuel within seven years of receiving export authorization. DOE also said it would not consider applications for extending the seven-year deadline unless a project has both started construction and can demonstrate that “extenuating circumstances outside of its control” are to blame for delays.
Projects with export licenses that are unable to demonstrate such circumstances could apply for a new authorization. DOE said the policy would increase transparency for license holders and “pending applicants who have not yet commenced exports, while providing greater certainty about DOE’s approvals for the LNG export market.”
ClearView Energy Partners LLC said the policy would prevent license holders from deferring construction indefinitely. “As such, we consider this to be a positive policy move for projects that may be coming to market later, but with stronger commercial prospects.”
Lake Charles was first granted an export extension in 2020 that expires in December 2025. It had requested another extension to start exports by December 2028.
Earlier this year, Energy Transfer Co-CEO Marshall McCrea said management was “disappointed” in the pace of contracting activity for the Lake Charles project. Slow progress signing up project offtakers has delayed a final investment decision, McCrea said during the company’s year-end earnings call.
Energy Transfer has signed agreements to supply 8 million metric tons/year (mmty) of LNG so far, but it is aiming to secure 12 mmty in an “extremely competitive” LNG market full of other U.S. projects working toward sanctioning, McCrea said.
In another order issued Friday, the DOE did approve a request from a Sempra affiliate to extend the export deadline for the Port Arthur LNG facility. The order was consistent with another from the Federal Energy Regulatory Commission that extended the project’s construction and in-service deadlines.
The Port Arthur project was sanctioned last month. But Sempra said the Covid-19 pandemic delayed offtake contracts and its final investment decision. The company has also spent more than $220 million preparing the site and getting ready for full construction.
