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Back in September 2019, the FERC granted a five-year authorization to Eagle LNG Partners Jacksonville to site, construct, and operate the LNG terminal on the St. Johns River in Jacksonville.
However, Eagle LNG now requests a five-year extension from the regulator to complete the Jacksonville project by September 19, 2029, according to a FERC filling dated July 29.
Eagle LNG says that the Jacksonville project has been impacted “substantially” by the Covid-19 pandemic, which began only six months after the issuance of the September order.
In addition to the challenges to the Jacksonville project resulting from Covid-19,
Hurricane Ian, which made landfall in Florida during September 2022, also impacted Eagle
LNG’s ability to complete the project by the originally imposed deadline, it said.
The Jacksonville project is a greenfield facility that will consist of three liquefaction trains, each capable of liquefying about 44 million standard cubic feet (MMcf) per day of domestically-produced natural gas, or a total project capacity of about 132 MMcf per day.
Eagle LNG designed the project to be small in scale to support the export of LNG via small- to mid-sized LNG carriers to markets that cannot be served by large LNG carriers, such as Aruba.
“Substantial progress”
“Since the September order, Eagle LNG has made substantial progress in advancing the
Jacksonville project, continually making good faith efforts to meet the deadline of September 24, 2024,” the firm owned by private equity firm Energy & Minerals Group said.
To date, Eagle LNG has spent more than $83 million to develop the project, it said.
This includes expenditures for site acquisition, property taxes, facility engineering, technical
consulting services, safety and marine consulting services, legal services, and community
relations activities.
In addition, Eagle LNG is in the process of securing, long-term offtake agreements under
which it would supply LNG from the Jacksonville project to Caribbean and Latin American
counterparties.
Specifically, Eagle LNG, or its affiliates, have signed a heads of agreement with Aqualectra, an entity based in Curaçao, and a heads of agreement with St. Kitts Electricity.
Eagle LNG also signed a regasified LNG sale and purchase agreement with Water en
Energiebedrijf Aruba (W.E.B.), and a heads of agreement with Antigua Power.
Eagle LNG said it continues to negotiate with the governments of Caribbean nations to supply LNG from the Jacksonville project to replace diesel and HFO in power production.
The company is “hopeful” that these negotiations will progress to additional executed offtake agreements.
Construction to take up to 36 months, costs up
Eagle LNG has taken “concrete steps” towards construction of the Jacksonville project.
The firm has worked with an engineering company to verify the project’s front-end engineering design and update the EPC cost estimate for the Jacksonville project.
“The updated cost estimate was substantially greater than Eagle LNG had anticipated, and in order to enhance the economic viability of the project Eagle LNG has been engaged for the past several months in efforts to identify opportunities for materials, labor, and installation cost savings,” it said.
Eagle LNG said it continues to explore various ways by which it may improve the pricing reflected in its most recent EPC cost estimate.
Moreover, the company expects that the construction of the Jacksonville project will take 24 to 36 months, with construction starting following a final investment decision to be made by Eagle LNG.
In order to make that final investment decision, Eagle LNG and its investors must be able to conclude that the project’s FERC authorization provides enough time to complete construction of the Jacksonville project, it said.
This is the reason why Eagle LNG requests that the FERC construction completion deadline be extended to September 19, 2029, the company added.