Golden Pass LNG Construction Turmoil to Delay Plant’s Startup

Reuters, June 6, 2024

The startup of Golden Pass LNG, the QatarEnergy (QATPE.UL) and Exxon Mobil (XOM.N) $11 billion joint venture liquefied natural gas project in Texas, has been delayed by at least six months due to construction turmoil, analysts said on Thursday.

The project at the Sabine Pass site of a former gas-import terminal that was converted to process natural gas for LNG exports, is one of two large U.S. terminals whose startup had been expected to significantly expand supplies from the world's top exporter of the fuel in the next 12 months.

Golden Pass LNG's startup, however, was thrown into doubt last month when lead contractor Zachry Holdings (ZHII.UL) filed for bankruptcy and quit the project. The plant was 75% complete and an updated completion schedule would be disclosed, Exxon then said.

On Wednesday, a regulatory filing on a pipeline that will deliver natural gas to the plant said the latest forecast for startup may be revised due to Zachry's bankruptcy, without providing a new date.

The filing indicates "train one will be online by the end of June 2025, with trains two and three following in December 2025 and March 2026," analyst Zach Van Everen at energy investment bank Tudor, Pickering, Holt and Co wrote in a note published on Thursday.

The first of three processing units was originally expected to begin processing this year, but was pushed back earlier this year into the first half of 2025. The full over 15 million metric tons per annum (MTPA) production was also initially set for 2025, Golden Pass LNG previously said.

Golden Pass LNG had warned earlier in May of possible impacts on construction of the first three trains of the project.

A company spokesman on Wednesday said he had no update on a revised completion schedule or whether the joint venture owners have identified a new engineering, procurement, and construction contractor.

Exxon, which owns a 30% stake in the project, was not immediately available for comment.

In a March 21 complaint filed in U.S. bankruptcy court, Houston, San Antonio, Texas-based Zachry also said Golden Pass was at least $2.4 billion over the original budget for the project.

Zachry separately filed on Monday a notification to Texas state officials that it had dismissed 4,072 workers tied to the Sabine Pass project, according to a Worker Adjustment and Retraining Notification.

(Reporting by Curtis Williams; Editing by Marguerita Choy)

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