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Freeport seeks more time to build Train 4 at LNG export plant

8/3/2020

U.S. LNG company Freeport LNG asked federal energy regulators for three more years until May 2026 to complete its proposed fourth liquefaction train at its LNG export plant in Texas.

The U.S. Federal Energy Regulatory Commission (FERC) approved construction of the fourth train in May 2019, requiring Freeport to finish the facility within four years by May 2023.

Like other LNG exporters around the world, Freeport put off making a final investment decision (FID) to build the fourth train earlier this year after gas prices in Europe and Asia collapsed to record lows due to coronavirus demand destruction.

“Given the current market conditions resulting from COVID-19, Freeport LNG does not expect to reach FID on Train 4 this year,” Freeport spokeswoman Heather Browne said, noting “we can be ready to start construction by mid-2021, if market conditions improve.”

Before delaying the FID in March, Freeport had said it planned to make a decision on Train 4 during the first quarter of 2020, which would have enabled the unit to enter service in 2023.

In mid-2019, a dozen North American developers, including Freeport, said they planned to make FIDs by the end of the year. But none of those projects are under construction. All of those FIDs were delayed until 2020 or later.

At the start of 2020, another dozen developers - some from 2019 - said they planned to make FIDs by the end of this year. Currently, however, that total is down to just four, and analysts said they expect only one project to actually go forward this year.

Each train at Freeport is designed to produce about 5 million tonnes per annum (MTPA) of LNG or around 0.7 billion cubic feet per day (bcfd) of natural gas. (Reporting by Scott DiSavino; Editing by David Gregorio and Lisa Shumaker)