Would be floating LNG project developer Delfin Midstream will need to submit an updated version of its application to own, built and operate an FLNG-based project off the US Gulf coast after making many alterations to the planned development, US authorities have ruled.
The US Department of Transportation’s Maritime Administration (MARAD) said in a letter filed to the chief executive of subsidiary Delfin LNG, Dudley Poston, that it no longer supports its 2017 decision to issue a licence for the company to own, construct and operate a deepwater port.
MARAD said that in the seven years since its decision Delfin has made “widespread changes” to the project.
They included its ownership, design, financing and operations which have resulted in a proposal that is not the same as the one originally approved.
MARAD said the project proposal will now need a “thorough” review and has asked Delfin to update its application and submit an amended version of it.
Delfin’s offshore LNG production facility has been designed to support four FLNG units capable of producing a total of 13.3 million tonnes per annum of LNG.
The company has signed up a string of LNG offtake agreements with big-name buyers, secured yard slots for its units and has said it is in close to taking a final investment decision on its first three FLNG vessels.
MARAD’s letter revealed that in 2023 Delfin changed its plans for the FLNG units, which it had originally said it was planning to own and operate.
It said Delfin is now planning that the FLNG units will potentially be owned, financed and operated by third parties.
“This is a significant departure from what was contemplated and approved,” MARAD said, referencing its 2017 decision, “and will require additional evaluation and consideration”.
The Department of Transport body said that originally an equity portion of project costs was to be provided by Enbridge Holdings along with Delfin affiliates with Korea Development Bank committing to $1.5bn of debt financing and Enbridge acting as a guarantor for Delfin’s decommissioning costs and obligations.
But MARAD said these parties appear to no longer be involved.
In June 2023, Delfin announced it had paired with Japan’s Mitsui OSK Lines under which MOL would be taking a stake in the company and assist in the construction and operation of the FLNG units.
The maritime arm also highlighted design changes to the FLNG units’ mooring, power generation and cooling systems which were not included in its original final environmental impact statement for the project.
MARAD’s new decision will set the projects planned time schedule back again as Delfin must now submit its amended application and a supplemental environmental assessment which will need to go out for local state and public review before the regulatory body issues a new decision on the proposals.
