The Golden Pass liquefied natural gas (LNG) export project in Texas, a massive $11.6 billion undertaking, is seeking a three-year extension to complete construction due to setbacks caused by the bankruptcy of its former lead contractor. According to documents filed with the Federal Energy Regulatory Commission (FERC) on August 28, the developers are asking for more time, extending the deadline to November 30, 2029. Originally slated to be operational by December 2021, the project had already been granted an extension to November 2026.
The main contractor, Zachry Holdings, filed for Chapter 11 bankruptcy protection in May, citing a $2.4 billion budget overrun and financial difficulties. The company had been struggling with cost disputes, payment issues, and project delays with Golden Pass LNG Terminal LLC, the project developer. The agreement reached in July allowed Zachry Holdings to exit the project, but this transition has introduced additional delays.
Golden Pass LNG, a joint venture between Qatar Energy and ExxonMobil, holds 70% and 30% stakes in the project, respectively. The project is located in Port Arthur’s Sabine Pass, on the site of a former import terminal that has been repurposed for LNG export. With an annual export capacity of about 18 million tons, the Golden Pass project aims to commence LNG production by late 2025, with commercial operations following soon after. However, the new extension request accounts for potential further delays, including those from external factors like hurricanes and necessary commissioning and start-up activities.
The project’s initial budget of $9.25 billion, set in 2019, has increased by 25% to $11.6 billion by August 2022 due to challenges including COVID-19 and geopolitical tensions. This latest extension reflects the ongoing complexities and adjustments required to bring the ambitious project to fruition, ensuring it can meet its updated timeline and operational goals.
