Bechtel will begin full construction in April on the estimated $25-billion Driftwood liquefied natural gas complex in Louisiana under a $15.5-billion fixed-price contract, a spokeswoman for energy firm Tellurian Inc. said.

Charif Souki, the developer’s executive chairman, said in a podcast earlier this month that work will start without an official final investment decision while the firm completes finance negotiations. “We have access to enough capital to complete the first year of construction,” he said in a Feb. 4 announcement.

The project, if built to full scope, would include five liquefaction trains, three LNG storage tanks, a marine terminal and 96-mile pipeline, with about 6,500 construction workers at peak.

The spokeswoman said LNG shipment is set to start in 2026. Tellurian noted 10-year agreements with three LNG users for about 9 million metric tons per year.

FERC Tightens Gas Project Reviews

While the project received construction approval in 2019 from the Federal Energy Regulatory Commission, it is likely to face new agency scrutiny, as will other natural gas projects, over climate change, landowner and community impacts, as well as stated need for the fuel supply, in a FERC policy change approved 3-2. It updates policy in place since 1999 and affects both new and pending project approvals.

FERC will look more closely at a project's greenhouse gas emissions during operation, but also those from upstream gas production and downstream gas use.

FERC "created a presumption that proposed projects with estimated greenhouse gas emissions of 100,000 metric tons per year of CO2 equivalent will have a significant impact on the environment," says Frederick Jauss IV, an attorney at Husch Blackwell LLP in a Feb. 17 analysis.

He adds that the information could be used  "as a threshold trigger" to determine whether a project would need a more involved environmental impact statement during a NEPA review rather than an environmental review that had been typical.

Jauss termed the new policy "an unprecedented expansion of FERC’s consideration of environmental impacts of proposed projects," which will "undoubtedly be subject to judicial challenge."

Comments on the GHG policy can be filed through April 4.

FERC's Glick: "Not Here to Create Roadblocks"

The US Chamber of Commerce's Global Energy Institute said the FERC action "will make it much more difficult to permit and build badly needed natural gas infrastructure."

For FERC Chairman Richard Glick, a Democrat named to lead the commission last year, "This is not some sort of political maneuver to get natural gas out of our system or to get natural gas to not be a fuel of choice in the future," he told S&P Global. "I'm not here to create roadblocks for pipelines."

Meanwhile, the Sierra Club has filed a petition on behalf of Louisiana environmental groups that asks the US Environmental Protection Agency to deny Tellurian’s federal Clean Air Act operating permit request for the proposed terminal, claiming flaws in its application and an incorrect approval by the state's environmental agency based on errors in its emissions modeling.

Bechtel also said Feb. 7 that it has completed work on the sixth LNG-processing train at the Sabine Pass facility, also in Louisiana, with the project for Cheniere Energy finished ahead of schedule and within budget. Work began in June 2019. The facility now has total production capacity of about 30 million tons per year.

Cheniere Energy said it could make a final investment decision this year on a proposed expansion of its Corpus Christi, Texas LNG facility.