Magnolia LNG and Kinder Morgan have filed joint documents with the US Federal Energy Regulatory Commission (FERC) requesting a five-year extension to the deadline for completion of the Magnolia LNG export terminal in Louisiana, US, blaming ‘unforeseeable developments in the global LNG market.’
They say that the global oversupply of LNG, disruptions in the China-US LNG trade and the ongoing COVID-19 pandemic have affected the terminal’s ability to secure offtake contracts.
When finished, the terminal, which was bought by Glenfarne Group in June through its subsidiary, Magnolia LNG Holdings, will have a capacity of 8.8 million tpa and can pretreat, liquefy and store LNG for domestic use and export. Kinder Morgan is developing the Kinder Morgan Louisiana Pipeline (KMLP), which will connect the terminal to various interstate pipelines for gas transmission.
Under the initial permit for the development issued by FERC, the Magnolia LNG project has a completion date of 15 April 2021, however, the developers have requested that this be extended to 15 April 2026.
‘Despite Magnolia LNG’s diligent efforts to develop the Magnolia LNG Project, global market conditions have impacted the Magnolia LNG’s ability to secure long-term offtake contracts and achieve a final investment decision (FID). KMLP’s construction of the Lake Charles Expansion Project is dependent upon Magnolia LNG achieving FID for the Magnolia LNG Project. Therefore, Magnolia LNG and KMLP request a five-year extension of their authorizations,’ write the companies in the FERC filing.
The developers expect the short-term oversupply to ease and say that once this has happened, Magnolia LNG will be a competitive, low-cost LNG provider. Parent company Glenfarne says that it is committed to success of the project.