Exxon Delays Startup of $10-Billion Golden Pass LNG Export Project

ExxonMobil is delaying the start-up of its joint venture Golden Pass LNG export project in Texas to late 2025 from the first half of next year after work at the facility stalled following the bankruptcy of the lead contractor, Exxon’s CFO Kathy Mikells told Bloomberg in an interview on Friday.

The delay in the timeline for the start-up means that Exxon and its partner in the project, Qatar’s state firm QatarEnergy, will launch the export plant about six months later than originally scheduled, Mikells told Bloomberg.

In a setback for the project, which is worth around $10 billion, the lead contractor Zachry Holdings initiated a voluntary court-supervised Chapter 11 process in May and fired thousands of workers.

“As the project’s lead contractor, we have navigated significant challenges and disruptions stemming first from the COVID-19 pandemic and, more recently, international geopolitical issues,” chairman and CEO John Zachry said.  

“Because we have been unable to find a path forward, we have been forced to take action to protect our business. The process we are starting today provides us mechanisms to initiate a structured exit from the GPX project.”

As a result, progress on the LNG export project at Sabine Pass, Texas, stalled.

Zachry said in June that the U.S. Bankruptcy Court for the Southern District of Texas had approved its settlement agreement with Golden Pass LNG Terminal LLC and joint venture partners CB&I LLC and Chiyoda International Corporation. The court decision paved the way for the resumption of work at the project as the settlement allows Golden Pass to resume construction on an expedited basis while Zachry will exit the project.

Chiyoda, which had won the contract to build Golden Pass LNG in a joint venture with McDermott and Zachry, is now the lead contractor replacing Zachry.

Golden Pass LNG’s estimated send-out capacity will be around 18 million tons of LNG per year and its location about 10 miles south of Port Arthur in Jefferson County, Texas, on the Sabine-Neches Waterway is a strategically chosen spot. The Port Arthur area is one of only a few deepwater ports along the Gulf Coast suitable for LNG carriers, the Golden Pass LNG partners say.

By Charles Kennedy for Oilprice.com

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