In its ruling, the DOE noted that the introduction of the CCS component to the liquefaction process would demand changes to Lake Charles LNG's approvals from the department and might even necessitate a new authorisation from the FERC
DOE rejects second deadline extension for Energy Transfer's Lake Charles LNG export project. (Credit: Comstock on Freeimages)
The US Department of Energy (DOE) has declined to reevaluate Energy Transfer’s appeal for a second deadline extension for its Lake Charles liquefied natural gas (LNG) export project in Louisiana.
According to Energy Transfer’s filings with the DOE, the verdict could potentially terminate the project, on which the company has already spent $350m.
The DOE, in its order, stated that Energy Transfer’s reasoning for the additional extension was unconvincing. The request was partially based on modifications to the design of the Lake Charles LNG project to incorporate a significant carbon capture and sequestration (CCS) element.
In its ruling, the DOE noted that the addition of the CCS component to the liquefaction process would demand changes to Lake Charles LNG’s approvals from the department and might even necessitate a new authorisation from the Federal Energy Regulatory Commission (FERC).
Energy Transfer, in its appeal for reconsideration in May 2023, argued that the DOE’s previous denial was based on an interpretation that would probably lead to the demise of the midstream project.
As per the department, the export commencement deadline of 16 December 2025, initially granted under the company’s first extension request, is still valid under both order nos. 3868 and 4010, as amended.
The DOE has stated that if the Lake Charles LNG project fails to start exports by this date, the company can file a new non-free trade agreement (FTA) application, which will be assessed based on the latest market data and current policies.
Last month, the DOE turned down Energy Transfer’s plea for an extension of three years for the Lake Charles LNG project, citing that it did not meet the criteria for second extensions. This decision led one prospective client to halt contract negotiations, reported Reuters, citing the company.
Energy Transfer stated that it required a three-year extension to manage unexpected delays and a considerable deficit of necessary equipment for the construction of the Lake Charles LNG project.
The LNG developer had secured agreements for 7.9 million tons of LNG off-take, which equates to nearly half of the proposed plant’s production.
Energy Transfer is constructing the LNG export facility in Lake Charles, located along the Calcasieu Ship Channel.