Federal regulators uphold 3-year extension for Tellurian to build Drifwood LNG plant
HOUSTON, July 9 (Reuters) - U.S federal regulators upheld on Tuesday an earlier decision to allow liquefied natural gas developer Tellurian a three-year extension to construct its Driftwood LNG plant on the west bank of the Calcasieu river, near Lake Charles, Louisiana.
The United States is the world's largest exporter of the super-chilled gas and Tellurian is one of dozens of U.S. companies trying to develop LNG export facilities.
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Tellurian has spent years and hundreds of millions of dollars trying to finance and build the 27.6 million metric ton per annum (mtpa) LNG export facility and only recently sold its upstream asset to Aethon Energy to pay off long-term debt.
As part of the sale, Aethon signed a preliminary deal to purchase 2 million tons per annum of LNG from Tellurian's Driftwood LNG plant when the proposed project's first phase is completed.
U.S. regulators denied environmental group Sierra Club's request for a rehearing of the extension approval, saying the Commission was not revisiting the authorization, but only changing the applicable deadline.
Federal regulators did not agree with the Sierra Club's argument that a pause by the Biden administration on its authorizations of LNG exports to some countries should apply to its decision to grant a construction extension since Driftwood already has a license to export LNG to so called non-FTA countries.
"Accordingly, DOE’s temporary pause on its authorization of LNG exports to certain nations does not alter the Commission’s good cause analysis here," the Commision said.
FERC said good reasons existed for Driftwood's construction extension request as Driftwood took regular action before the Commission to advance construction, and received authorizations from Commission staff to conduct construction activities.
(Reporting by Curtis Williams in Houston; Editing by Emelia Sithole-Matarise)