The U.S. Federal Energy Regulatory Commission (FERC) on Oct. 7 approved the request of a unit of Glenfarne Group LLC to give it five more years, until April 2026, to complete the Magnolia LNG export plant in Louisiana.
FERC approved construction of Magnolia and related pipeline expansions by a unit of Kinder Morgan Inc. in April 2016.
That approval required the companies to complete the project within five years, by April 2021.
Glenfarne, which acquired Magnolia from LNG Ltd of Australia in May 2020, said “unforeseeable developments in the global LNG market have affected Magnolia’s ability to enter into long-term LNG offtake contracts ... critical to securing project financing and achieving (final investment decision),” referring to purchase agreements for gas.
Those “unforeseeable developments” included global energy demand destruction from government lockdowns to stop the spread of the coronavirus and disruptions caused by the U.S.-China trade war.
Glenfarne has said it expects to decide late next year whether to build the Magnolia plant and the Texas LNG facility it is developing in that state. If the company decides to build the projects, they could enter service around 2025.
Several developers have put off decisions to build LNG projects in North America over the past year due to uncertainty about demand as the pandemic and other factors have cut energy consumption.
Even before the pandemic, gas prices were already trading at their lowest levels in years, making customers hesitant to sign long-term deals needed to finance multi-billion-dollar LNG projects because the world was already awash in gas after a record number of export plants entered service in 2019.
Magnolia is designed to produce 8.8 million tonnes per annum of LNG, or 1.2 billion cubic feet per day of natural gas. One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.
Fisher will resign from the board effective February 1, 2021.
While big corporate deals lifted M&A value to $52 billion, upstream oil and gas deal flow for 2020, as measured by Enverus, fell to historic lows.
Southwestern Energy announced that Julian Bott, executive vice president and CFO, died unexpectedly on Jan. 3 after experiencing a sudden non-COVID related medical condition.