FLNG Developer Delfin Secures License for Gulf LNG Project

FLNG developer Delfin has achieved a significant milestone by obtaining a long-awaited license from the Maritime Administration for the installation of a three-unit FLNG liquefaction hub in the U.S. Gulf region. This project is based on leveraging existing infrastructure to create a cutting-edge LNG export facility.

The cornerstone of Delfin’s proposed LNG project is the UTOS pipeline, also known as the U-T Offshore System. Originally constructed to transport gas from offshore wells to onshore processing facilities, the pipeline fell into disuse when gas production levels declined, rendering it economically unviable. In 2014, Delfin acquired the pipeline from Enbridge and subsequently applied to repurpose it for exporting LNG from a floating terminal.

The innovative plan involves reversing the flow direction of the existing pipeline to enable the sale of surplus U.S. natural gas to international markets through a floating export terminal. At the offshore end, up to three FLNG units will be moored, with a combined capacity of up to 13 million tonnes per annum. The location of the facility allows for easy access for fully laden LNG carriers, making it a strategically positioned hub for LNG exports.

With long-term offtake agreements already in place with trading house Gunvor and Chesapeake Energy, Delfin is poised to capitalize on the growing demand for U.S. LNG in global markets. The company has also explored potential partnerships with Chinese buyers, underscoring its commitment to expanding its reach in the LNG sector.

Accelerated Project Plans

Two years ago, Delfin engaged Wison Offshore for the design and engineering of the FLNG units, signaling its intent to expedite project development. Market conditions have further fueled this acceleration, with Delfin aiming to commence construction on the first FLNG unit by mid-2024.

After a meticulous 10-year review process, MARAD recently granted Delfin the operating license essential for the LNG export facility’s operation. This critical milestone, coupled with the Federal Energy Regulatory Commission’s approval for non-free trade agreement exports, paves the way for Delfin to advance its ambitious LNG project.

Future Expansion and Collaborations

In addition to the primary project, Delfin holds rights to a neighboring subsea gas pipeline system, potentially earmarked for the Avocet LNG expansion. Leveraging the groundwork laid for the Delfin LNG approval, Delfin anticipates a streamlined permitting process for this future development.

Furthermore, Delfin’s involvement in the Haisla LNG project in British Columbia underscores its commitment to fostering international partnerships and advancing sustainable LNG initiatives.

With key regulatory approvals in place and a robust foundation for growth, Delfin is poised to revolutionize the LNG landscape in the U.S. Gulf region and beyond.