Privately held US liquefaction player Freeport LNG has asked federal regulators for more time to develop a planned one-train expansion to its currently operating export terminal in Texas, saying weak market demand driven by the Covid-19 pandemic has made it more difficult to commercialise the project.

In a letter sent on Monday to the Federal Energy Regulatory Commission (Ferc), Freeport LNG also said that it planned to rebid the engineering, procurement and construction contract for the fourth train, since contractor KBR recently announced its intention to pull out of energy projects.

The situation "adds additional uncertainty as to the ultimate construction schedule," Freeport LNG said.

The request comes as US developers have been forced to postpone projects amid a soft market for liquefied natural gas as Covid-19 lockdowns have eroded global demand for energy.

Sempra Energy, NextDecade and Tellurian are among the developers that have put off until next year final investment decisions on LNG projects originally expected this year.

For Freeport LNG, Ferc permitted the fourth train in May of last year, giving the developer until 17 May 2023 to place the liquefaction unit in service.

However, Freeport LNG now says it will not be possible to meet the deadline, as construction has not yet begun and building the unit requires at least 42 months.

"The inability to meet this schedule, along with other factors, is impeding Freeport LNG’s efforts to progress commercialisation of the Train 4 project," the operator told Ferc.

"Additionally, the current world-wide economic climate and depressed global LNG prices resulting from the coronavirus pandemic make it challenging to complete long-term contracts with potential customers, resulting in associated delays for LNG projects in the United States and around the world."

Freeport LNG added that uncertainty around the 2023 deadline "further exacerbates" the challenges surrounding the project.

The company requested an extra three years to build the project, with a deadline to enter service by 17 May 2026.

The timeframe aligns with export requirements from the US Department of Energy, which call for the start of long-term exports of LNG from Train 4 to non-free trade agreement countries by no later than May 2026, Freeport said.

LNG

Freeport LNG asks for more time to develop Train 4