Delfin Receives MARAD Approval for FLNG Export Terminal in U.S. Gulf

 

FLNG developer Delfin has secured a long-sought license from the Maritime Administration to install a three-unit FLNG liquefaction hub in the U.S. Gulf, based around existing infrastructure. 

Its proposed Delfin LNG project centers on the UTOS pipeline, or U-T Offshore System. The pipeline runs from Cameron Parish out into the U.S. Gulf, and was originally built to bring gas from offshore wells back to land for processing and sale. Former owner Enbridge shut down the pipeline in 2011 as gas flows reduced to levels that were no longer commercially viable; Delfin bought it in 2014 and filed an application with the Department of Energy to use it as an export line for an FLNG complex.

Delfin's plan is to reverse the direction of flow in the existing line and sell now-abundant supplies of U.S. natural gas to foreign buyers via a floating export terminal. At the seaward end would be as many as three anchored FLNGs, capable of up to 13 million tonnes per annum of output, and situated in water deep enough to accommodate fully laden LNG carriers alongside. 

Delfin has already arranged long-term offtake contracts with trading house Gunvor and with Chesapeake Energy, and has explored additional options with Chinese buyers. Two years ago, it entered into an agreement with Wison Offshore for the design and engineering of the FLNG units, and said that market conditions were prompting an acceleration of project plans. At the time, the objective was to be ready to begin construction on the first of the planned FLNG units by mid-2024. 

Delfin had applied for an operating license from MARAD in 2015, and MARAD confirmed Friday that this piece of the puzzle has now fallen into place after a 10-year review. The license is now in hand, and it lets Delfin own, build and operate a deepwater port for LNG export purposes. Paired with its Federal Energy Regulatory Commission approval for exports to non-free trade agreement countries, it is now one step closer to moving forward.

For future expansion, Delfin has rights to a second, adjacent subsea gas pipeline system that could be used for a parallel development, Avocet LNG. It believes that permitting would be easier for this expansion because of the work previously done for MARAD's Delfin LNG approval. 

The company is also a partner in the Haisla LNG project, a small-scale FLNG project with the Haisla Nation in British Columbia.