Delfin Midstream Inc announced Wednesday a $5 billion investment to launch a Gulf Coast project that will be the United States’ first floating liquefied natural gas (FLNG) facility.
Delfin FLNG 1 would also be “the largest FLNG project globally, with an expected export capacity of 4.4 million tonnes of LNG per year”, Delfin said in a press release.
The project is phase 1 of the bigger Delfin LNG deepwater port project offshore Cameron Parish, Louisiana. Delfin LNG holds federal authorization to export up to 13.2 million metric tons per annum (MMtpa) of LNG.
“Concurrent with the FID [final investment decision], a group of investors led by Global Infrastructure Partners (GIP), a part of BlackRock, including existing Delfin investors Mitsui O.S.K. Lines, Ltd (MOL), owner of the world’s largest fleet of LNG carriers, Vitol, a leading energy and commodities trader, and Diameter Capital Partners, a leading alternative credit asset manager, have agreed to invest in the first phase of this critical energy infrastructure project”, Houston, Texas-based Delfin said.
The first vessel is targeted to start production 2030. Delfin said it is working to secure arrangements toward FIDs in 2027 for two more vessels for the Delfin LNG project.
“Delfin FLNG 1 is backed by long-term LNG sales agreements with leading global energy companies including Vitol, Expand Energy, Centrica and Gunvor and has secured all necessary permits and licenses required to begin construction”, Delfin said.
The Department of Energy (DOE) granted the project a permit to export to countries with a free trade agreement (FTA) with the U.S. on February 20, 2014 and a non-FTA approval June 1, 2017. The approved volume is equivalent to about 657.5 billion cubic feet (Bcf) per year of natural gas, or 1.8 Bcf per day, as stated by DOE. Delfin had proposed 4 FLNG vessels, each with a 3.3 MMtpa capacity.
Mark Florian, head of GIP Mid-Market Funds, said Wednesday, “Backed by an experienced management team, proven construction partners and long-term agreements with leading energy companies, Delfin FLNG 1 is well positioned to deliver cost-competitive U.S. LNG to global markets”.
Ben Marshall, president and chief executive of Vitol Americas, said, “This is an important investment for Vitol in the United States”.
MOL president and chief executive Jotaro Tamura said, “We are delighted to further our strategic partnership with Delfin while continuing to leverage our significant expertise in offshore floating facilities to support the Company’s essential work and expand our business in the U.S. and across the gas value chain globally”.