June 10, 2024 [Yahoo Finance]- ExxonMobil CorporationXOM and QatarEnergy’s $11 billion Golden Pass LNG project has encountered significant hurdles, leading to a delay in its expected startup by at least six months.
According to a Reuters report on Thursday, the project, which was expected to bolster the supply of liquefied natural gas (LNG) within the next year, is now facing uncertainty due to construction setbacks.
The Golden Pass LNG facility, located at the Sabine Pass site, was initially designed to convert a former gas-import terminal into a cutting-edge LNG export hub. This ambitious project, wherein ExxonMobil holds a 30% stake, aligns with its strategic vision to enhance the natural gas supply chain from the world’s leading exporter.
The delay was caused by the unexpected bankruptcy filing of the lead contractor, Zachry Holdings, and its exit from the project, leading ExxonMobil to reassess the timeline. The financial implications of these delays are significant. In a recent U.S. bankruptcy court filing, Zachry Holdings revealed that the project had already exceeded the original budget by $2.4 billion. Additionally, on Monday, Zachry Holdings notified Texas state officials of the dismissal of 4,072 workers associated with the Sabine Pass project, per a Worker Adjustment and Retraining Notification.
As of the latest update, ExxonMobil indicated that although the plant was approximately 75% complete, it was yet to provide a revised completion schedule.
A recent regulatory filing indicated that the startup timeline for the plant may need to be revised due to the current disruptions. Originally, the first of the three processing units was expected to begin operations this year, with a full production capacity of more than 15 million metric tons per annum, set for 2025.
Per the report, the new timeline suggests that Train 1 of the facility might be operational by the end of June 2025. Following this, Trains 2 and 3 are projected to come online in December 2025 and March 2026, respectively. While these timelines have shifted from the prior ones, ExxonMobil is focused on mitigating delays and ensuring that the project meets its revised targets.
