GLNG: Golden Pass LNG gets 3-year extension for construction of plant

Federal regulators have granted a 3-year extension to QatarEnergy and ExxonMobil to complete construction of their joint venture project Golden Pass LNG located in Sabine Pass, Texas, Reuters reported on October 24.

In September, the two firms requested an extension from the Federal Energy Regulatory Commission (FERC) for their 18mn tonne per year (tpy) facility after being forced to secure a new primary contractor following Zachry Holdings filing for Chapter 11 bankruptcy in late July.

In its bankruptcy filing, the construction firm cited mounting construction costs due to soaring construction costs related to a shortage of skilled labour in combination with inflation because of rising wages in the Gulf Coast region.

In total, Zachry Holdings claimed that costs at Golden Pass LNG had ballooned to be at least $2.4bn more than its original budget for the project.

The Texas project has suffered a series of delays, with Golden Pass LNG originally planned to be finished in 2025. Without receiving the extension approval from FERC, the project’s authorization would have expired in November 2026.

Golden Pass LNG will now begin the process of rehiring and remobilising more than 4,000 skilled workers. The firm CB&I, a unit of McDermott International, has taken over as the project’s new primary construction contractor.

According to its filing in September, construction of the project’s first gas processing unit is more than 80% complete. Additionally, the second and third gas processing units are more than 40% and 30% completed respectively.

The $10bn construction project on the Gulf Coast near Sabine Pass in Texas involves the conversion of a former gas-import terminal to process natural gas as an LNG export facility. Upon completion, the project will become one of the biggest facilities in the world for processing the super-chilled fuel.

QatarEnergy holds a majority stake in the project with a 70% interest, while ExxonMobil holds a 30% stake.

If you'd like to read more about the key events shaping the global LNG sector then please click here for NewsBase's GLNG monitor.