Houston — The U.S. Department of Energy’s refusal to grant export permit extensions to liquefied natural gas (LNG) developers that fail to meet a construction deadline poses a new hurdle for greenfield plants, analysts said.
The DOE last month said it would grant future extensions solely on extenuating circumstances and rejected an extension for Energy Transfer’s proposed Lake Charles LNG project.
Around a dozen LNG projects in the U.S. and Mexico that would process more than 20 billion cubic feet per day (bcfd) of exports now face difficulties moving forward because of the change, according to an analysis from consultants Rapidan Energy Group.
Without extensions to obtain non-Free Trade Agreement permits, financing for new entrants could dry up, and “for many of these projects, it looks like ‘game over,'” said Alex Munton, Rapidan’s Global Gas Service director.
“Both projects represent exactly the type of forward-thinking environmentally sensitive model the DOE wants for U.S. gas exports in any form,” a Glenfarne spokesperson said.
Energy Transfer appealed the rejection of its permit extension, but has had one customer considering whether to go elsewhere, co-CEO Marshall McCrea told analysts this month.
However, the decision was welcomed by firms with established customers and operations.
Cheniere Energy Inc and Venture Global LNG, which have been able to regularly build new plants, praised the decision.
“Fully commercialized LNG projects, including Cheniere’s, have been constructed and have commenced exports within the seven-year deadline,” a Cheniere spokesperson noted.
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