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Department Of Energy Delays Launch Of New LNG Export Terminal

The U.S. Department of Energy has delayed a new LNG export project led by New Fortress Energy by asking it to resubmit an application for an export permit.

Reuters reports that the DoE had informed the company that if any part of its floating facility was onshore Mexico, it would have to reapply for an export permit.

The issue concerns the Altamira floating LNG project in Mexican waters and first production was previously expected in July. Then the date was moved to this month but if New Fortress Energy has to reapply for an export permit, there would be another delay.

The Altamira facility will have a capacity of 1.4 million tons of LNG annually and is part of a bigger project led by New Fortress Energy and Mexico state utility CFE to develop an LNG hub using both Mexican and U.S. natural gas. The price tag of the project is $1.4 billion.

In September, Reuters reported that there are plans for nine onshore and offshore LNG plants for Mexico. The facilities will produce mostly U.S. natural gas.

So far, New Fortress Energy has secured export licenses for countries that have a free trade agreement with the United States but the license for countries without such agreements is pending. It is the free trade agreement license that needs an application resubmission, per the Department of Energy.

"If the project site and design have been modified such that FLNG2 will be located onshore in Mexico instead of offshore, NFE Altamira is required ...to request an amendment of its FTA order," the department said earlier this week.

Meanwhile, U.S. energy companies booked the second-highest rate of LNG exports on record last month. The total amount exported in October from the U.S. reached 7.92 million tons, Reuters reported on Wednesday, citing data from LSEG.


By Charles Kennedy for Oilprice.com

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