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Tellurian Delays Construction on $27B Louisiana Energy Project

Dive Brief:

  • Natural gas company Tellurian has pushed the start of construction on its $27 billion Driftwood LNG project near Lake Charles, Louisiana, to next year and is reconsidering the need to build the $4.2 billion Permian Global Access Pipeline to serve the Driftwood facility.
  • Reduced demand, low natural gas prices and the COVID-19 pandemic have made it difficult for Tellurian to firm up deals with equity investment partners, according to comments made by CEO Meg Gentle that were first reported by S&P Global. She said the company expects to be able to have the necessary agreements in place in the first half of 2021 so that it can secure financing and start construction.
  • When Tellurian awarded Bechtel $15.2 billion in contracts for construction of the project’s export facility in 2017, construction was expected to start in 2018, with the facility operational in 2022. ​

Dive Insight:

Engineering for the project, according to a recent conference presentation, is 30% complete. Both the pipeline and export facility have secured all necessary permits.

Bechtel’s contract for the Driftwood project consists of four fixed-price, lump-sum, turnkey agreements for engineering, procurement and construction services. The four, staggered phases of the project on the 1,000-acre site will include:

  • 20 liquefaction units.
  • Liquefaction technology.
  • 20 GE refrigeration compressors.
  • Three 235,000 cubic-meter, full-containment LNG storage tanks.
  • Three marine loading berths.

Bechtel, which has also invested $50 million in Tellurian, is entrenched in the energy sector and has delivered approximately 30% of the world’s LNG capacity. The contractor is also heading up construction of the $6 billion Shell ethane cracker and chemicals plant in Beaver County, Pennsylvania, where workers have complained that they have not been provided with adequate protection against the novel coronavirus, according to KDKA CBS Pittsburgh. In March, Shell temporarily suspended construction at the site until it could install safeguards.

Shell has committed to making the site safer for the thousands who work there every day, and its new measures include:

  • Staggering shifts and lunch breaks.
  • Ensuring social distancing.
  • Suspending large meetings.
  • More frequent cleaning and a ready supply of hand sanitizer.
  • More buses to decrease crowding.

There have been no reported cases of COVID-19 among the workers at the plant. ​

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