Sept 14 (Reuters) - Units of Glenfarne Group LLC and Kinder
Morgan Inc asked federal regulators for five more years
to complete the Magnolia LNG export plant and associated gas
pipeline expansions, according to filings made available on
The U.S. Federal Energy Regulatory Commission (FERC)
approved construction of Magnolia LNG and related pipeline
expansions in April 2016.
That approval required the companies to complete the project
within five years, by April 2021.
Glenfarne, which acquired the Magnolia project from LNG Ltd
of Australia in May 2020, said "unforeseeable developments in
the global LNG market have affected Magnolia LNGs ability to
enter into long-term LNG offtake contracts ... critical to
securing project financing and achieving (final investment
decision)," referring to purchase agreements for gas.
Those "unforeseeable developments" included global energy
demand destruction from government lockdowns to stop the spread
of coronavirus and disruptions caused by the U.S.-China trade
Glenfarne has said it expects to decide late next year
whether to build the Magnolia plant and the Texas LNG facility
it is developing in Texas. If the company decides to build the
projects, they could enter service around 2025.
Several developers have put off decisions to build LNG
projects in North America over the past year due to uncertainty
about demand as the pandemic and other factors have cut energy
Even before the pandemic, gas prices were already trading at
their lowest in years, making customers hesitant to sign
long-term deals needed to finance multibillion-dollar LNG
projects because the world was already awash in gas after a
record number of export plants entered service in 2019.
Magnolia is designed to produce 8.8 million tonnes per annum
(MTPA) of LNG or 1.2 billion cubic feet per day of natural gas.
One billion cubic feet is enough gas to supply about 5 million
U.S. homes for a day.
(Reporting by Scott DiSavino; Editing by Dan Grebler)