The Sierra Club environmental group on Nov. 8 urged the U.S. energy regulator to reject a request by liquefied natural gas developer Tellurian Inc for a three-year extension to complete construction of its $25 billion LNG export facility.

Tellurian received Federal Energy Regulatory Agency (FERC) approval in 2019 but did not start construction on its Driftwood LNG plant for three years.

The company is asking FERC, part of the Department of Energy, to extend its license into 2029 to complete the Louisiana plant that could export up to 27.6 MMmt per year.

In a filing with FERC, the Sierra Club contended that Tellurian failed to start construction early enough to meet the 2026 deadline. It alleged that canceled delivery contracts and "financial and governance woes" were behind the delays, not the COVID-19 pandemic.

Tellurian revealed in an August securities filing that trader Gunvor Singapore Pte Ltd terminated its contract to take cargoes.

The Sierra Club cited planet-heating emissions and possible environmental contamination from the plant. It said any uptick in U.S. LNG exports to Europe could be short-term and Driftwood may "be idle or operate below capacity" over its 20-year lifespan.

A spokesperson for Tellurian declined to comment.

If built, the plant would be one of the largest U.S. LNG export terminals. Global demand for LNG is expected to grow by more than 50% by 2035 from 2022 levels, according to Michael Stoppard, global gas strategy lead at data provider S&P Global Commodity Insights.

Last week, Tellurian said it remains on target to produce the first LNG at Driftwood in 2027, as it looks for customers to buy LNG from the plant.

The U.S. is the world's largest exporter of the superchilled gas and so far this year three projects have received financial go-aheads.

Comments