Delfin Midstream Inc. and Devon Energy Corp. entered into an LNG export partnership that includes a heads of agreement (HOA) for long-term liquefaction capacity and a pre-financial investment decision (FID) investment by Devon in Delfin, the companies said in a joint statement Sept. 5.
Delfin plans to take FID on the first floating LNG (FLNG) vessel of its 13-million tonnes/year (tpy) Delfin Deepwater Port, 40 nautical miles off the coast of Louisiana, by yearend, with operations expected to begin in 2026. The offshore port will be built in 3.5-million tpy increments using FLNG plants connected to onshore gas supplies via subsidiary-owned pipelines (OGJ Online, Aug. 1, 2022).
The modular project requires only 2-2.5 million tpy of long-term contracts to begin construction. All necessary permits have been secured.
The HOA provides the framework for finalizing a definitive long-term tolling agreement representing 1 million tpy of liquefaction capacity in Delfin’s first FLNG vessel, with the ability to add an additional 1 million tpy in Delfin’s first or a future FLNG vessel. The HOA also provides opportunity for additional future equity investments in Delfin by Devon. Devon said its 2022 guidance will remain unchanged.
The agreement comes on the heels of Delfin’s binding agreement with Vitol and an HOA with Centrica in recent months (OGJ Online, July 14, 2022; Aug. 22, 2022).