Commonwealth LNG, a project proposed for Louisiana and originally supposed to be up and running by 2027, will take until 2031 to complete, the company behind it has warned in a request for an extension to its deadline.
The company blamed the temporary ban on new liquefied natural gas capacity that the Biden administration imposed on the industry in its final year, following a report by an environmentalist that claimed LNG is more harmful than coal for the atmosphere.
The Trump administration canceled the ban this year, but that was not soon enough for Commonwealth LNG, the company said in its letter to the Federal Energy Regulatory Commission.
“These delays were beyond the control of Commonwealth and unavoidably affected Commonwealth’s ability to advance the Project on the schedule contemplated when its application was filed,” the company said, as quoted by Reuters.
The Commonwealth LNG facility in Cameron Parish, Louisiana, will have an annual capacity of 9.5 million tons of liquefied gas. The construction of the first phase will cost $11 billion, according to Commonwealth LNG and generate annual export revenues of some $3.5 billion. However, the company has yet to make the final investment decision on the project, it said in September, after it secured its export license from the Department of Energy.
Also in September, Commonwealth LNG secured a long-term supply deal with EQT for 1 million tons of LNG from its future Louisiana plant, bringing the total volume committed to future deliveries to 5 million tons, under deals with Japan’s JERA, Malaysian Petronas, and Glencore, in addition to EQT. This leaves 4.5 million tons yet to be contracted to secure the viability of the project, unless project developer Kimmeridge sticks to its commitment to offtake 2 million tons of LNG per year from the facility.
By Irina Slav for Oilprice.com