U.S. energy regulators on Wednesday granted Delfin LNG a second one-year extension until September 2021 to build its proposed floating liquefied natural gas export facility off the coast of Louisiana.
Delfin is one of several North American LNG developers that have delayed decisions on whether to go ahead with multibillion-dollar projects as gas prices slumped worldwide and buyers became reluctant to sign long-term agreements needed to fund construction.
Global gas prices collapsed because of an oversupplied market and coronavirus demand destruction. Big energy firms in recent years like Royal Dutch Shell and Woodside Petroleum Ltd spent billions on LNG projects as demand for the super-cooled fuel soared.
They are now writing down some of those investments, while other companies delayed or abandoned plans for LNG terminals.
Over the past year, at least 14 North American developers said they planned to make final investment decisions by the end of 2020. Now, just four of those projects are still hoping to go forward this year, and analysts said they expected only one of those projects to actually proceed this year.
The U.S. Federal Energy Regulatory Commission in September 2017 authorized Delfin to build its project by September 2019.
Delfin's project would use existing offshore pipelines to supply gas to up to four vessels that could produce up to 13 million tonnes per annum (MTPA) of LNG or 1.7 billion cubic feet per day (bcfd) of natural gas. Chief Operating Officer Wouter Pastoor said the company was still confident in the project.
"COVID-19 and the current energy markets have an impact on new LNG projects, but we see that merely as a matter of time to recover and we are encouraged by the feedback from the potential buyers," Pastoor said.
U.S. LNG exports jumped 68% in 2019 but were only expected to rise around 7% in 2020.
(Reporting by Scott DiSavino; Editing by Jonathan Oatis and Peter Cooney)