Tellurian CEO Meg Gentle has told an online investor conference that construction of the company’s Driftwood LNG export terminal in Louisiana, US has been delayed until 2021, according to S&P Global Platts.
The announcement was made during a presentation for J.P. Morgan’s energy conference on 16th June. Front end engineering and design (FEED) was completed in 2017 and construction was originally expected to begin by the end of 2019. Start-up, originally scheduled for late 2023, will now be delayed to late 2024, while full operations are not expected until 2026 at the earliest, Gentle said.
Recently, a memorandum of understanding signed between Tellurian and India’s Petronet LNG, which was expected to result in a first term offtake agreement for Driftwood LNG, expired without any deal being completed. Only Total has so far committed to the project after signing a US$500m (€445m) investment deal in 2019. Gentle told investors that Tellurian is still talking to potential partners and hopes to have enough agreements in place during the first half of 2021 to secure financing for construction.
Gentle also said that the US$4.2bn Permian Global Access Pipeline, which would have brought supplies from West Texas will not be built in time for the first phase of operations of the terminal, due to reduced drilling in the Permian basin. The company is reassessing the economics of the pipeline.
S&P Global Platts cites low international LNG prices, weak demand and the effects on the market from the COVID-19 pandemic as creating challenges for LNG exporters and developers. Utilisation rates at liquefaction terminals are at a 14-month low and many final investment decisions have been delayed. US exporters have been hit by cargo cancellations as a result of ultra-low prices in end-user markets in Asia and Europe. Tellurian has had to cut staff and renegotiate financing and low arrangements.
Driftwood LNG, when fully complete, will have a capacity of 27.6m t/y with up to 20 trains of 1.38m t/y each. It will have three storage tanks each with a capacity of 235,000 m3, and three marine berths. The total area of the site covers around 1,000 acres (405 ha).