Exxon Mobil Corp (XOM) and Qatar Energy have secured a three-year extension from federal regulators to complete their Golden Pass LNG plant in Texas. The Federal Energy Regulatory Commission (FERC) granted the extension due to delays stemming from the bankruptcy of the project's lead construction contractor, Zachry Holdings. Initially, the LNG plant was expected to be one of two large U.S. facilities that would significantly boost LNG supplies within the next 12 months. However, construction setbacks have pushed the timeline further out.
The Golden Pass LNG project, located at Sabine Pass, was built on the site of a former gas import terminal that was converted to process natural gas for export. The project has faced substantial financial difficulties, with the original budget now estimated to be $2.4 billion overrun. Despite these challenges, Exxon Mobil and Qatar Energy remain committed to completing the facility, which is set to bolster U.S. exports of liquefied natural gas (LNG).
Market Overview:- Exxon Mobil and Qatar Energy received a three-year extension to complete the Golden Pass LNG plant.
- The project faced delays due to the bankruptcy of lead contractor Zachry Holdings.
- Golden Pass is negotiating with McDermott International (MCDIF) to take over as the lead contractor.
- The Golden Pass LNG plant was originally set to expand U.S. LNG exports significantly.
- Zachry Holdings’ bankruptcy added $2.4 billion in additional costs to the project.
- McDermott International is in talks to become the new EPC contractor for the LNG facility.
- Golden Pass is expected to announce a new contractor soon to resume construction.
- The completion of the LNG plant will significantly boost U.S. LNG export capacity.
- Exxon Mobil and Qatar Energy will work to meet the new regulatory deadline.
The delays in completing the Golden Pass LNG plant reflect the financial and logistical challenges the project has faced since the bankruptcy of its original contractor. However, with the new extension, Exxon Mobil and Qatar Energy have more time to resolve the project's issues and appoint a new lead contractor to finish the facility. Once operational, the plant will play a key role in expanding the U.S.’s dominance as a top LNG exporter.
With McDermott International likely to take over the lead contractor role, all eyes are on the next steps for Golden Pass. The successful completion of this project will not only enhance LNG capacity but also provide a boost to the energy partnership between Exxon Mobil and Qatar Energy.
