ARKANSAS, Nov 09 (Future Headlines)- The Sierra Club, an environmental advocacy group, has called on the U.S. energy regulator to reject a request by liquefied natural gas (LNG) developer Tellurian Inc to grant a three-year extension for the completion of its $25 billion LNG export facility. Tellurian received approval from the Federal Energy Regulatory Agency (FERC) in 2019 for its Driftwood LNG plant but did not commence construction until three years later.

Tellurian has sought an extension of its license into 2029 to finalize construction of the facility located in Louisiana, which is designed to export up to 27.6 million metric tons of LNG per year. The Sierra Club’s filing with FERC argues that Tellurian’s failure to initiate construction early enough would prevent the company from meeting the initial deadline of 2026. The group contends that canceled delivery contracts and challenges related to “financial and governance woes” were responsible for the delays and not the COVID-19 pandemic.

One of the specific setbacks faced by Tellurian was the termination of its contract by trader Gunvor Singapore Pte Ltd, which was revealed in an August securities filing. The Sierra Club has voiced concerns about the environmental impact of the LNG plant, including emissions contributing to climate change and potential environmental contamination. It also expressed doubts about the long-term viability of increased U.S. LNG exports to Europe, suggesting that the Driftwood facility might operate below capacity or remain idle during its 20-year lifespan.

Tellurian has not commented on the Sierra Club’s appeal. If completed, the Driftwood facility would become one of the largest LNG export terminals in the United States. Projections indicate strong growth in global LNG demand, with an expected increase of more than 50% by 2035 compared to 2022 levels, according to Michael Stoppard, Global Gas Strategy Lead at data provider S&P Global Commodity Insights.

Tellurian recently confirmed its commitment to commence LNG production at Driftwood in 2027 and is actively seeking customers for the plant’s LNG output. The United States is the world’s leading exporter of LNG, and several LNG projects have received financial approvals this year to meet growing demand.

Reporting by Emad Martin