Exxon Mobil Corporation XOM and QatarEnergy, partners in the Golden Pass LNG venture, received a three-year extension from federal regulators to complete the construction of their major liquefied natural gas (LNG) export facility on the Texas coast, per Reuters. The decision by the Federal Energy Regulatory Commission comes after significant delays tied to the bankruptcy of the project's primary contractor, Zachry Holdings.

The Golden Pass LNG facility, a $10-billion endeavor, aims to produce 18 million metric tons of LNG annually. However, the project's timeline encountered substantial hurdles when Zachry Holdings, initially tasked with leading construction, filed for Chapter 11 bankruptcy in March. The unexpected development caused project schedule delays, forcing ExxonMobil and QatarEnergy to seek additional time to address construction disruptions and negotiate with potential contractors.

In August, the joint venture officially requested an extension, citing the need for additional time due to possible challenges, including severe weather and hurricane risks that could jeopardize on-site safety. Recognizing these risks, the regulators granted the additional three years to ensure the completion of the facility without further delays.

ExxonMobil and QatarEnergy are committed to starting LNG production by the end of 2025, with plans to achieve full commercial operations soon after. The Golden Pass LNG project is situated at the Sabine Pass, a site previously utilized as a gas-import terminal before being repurposed for LNG export capabilities.

The project's completion is highly anticipated as it is one of two large U.S. LNG facilities expected to significantly boost the nation’s LNG export capacity within the next year. This expansion could further solidify the United States' position as a leading global exporter of LNG, meeting the growing demand for superchilled fuel.

With Zachry Holdings' departure from the project due to bankruptcy (reportedly after cost overruns exceeded $2.4 billion), the joint venture is yet to appoint a new engineering, procurement, and construction contractor. However, discussions are underway with McDermott International, a potential candidate to assume the lead contractor role. The outcome of these negotiations could determine the project's path forward as it seeks to navigate construction complexities and stay on track for its revised timeline.

As the industry watches closely, the successful completion of the Golden Pass project is a crucial point in the U.S. LNG export landscape, promising to enhance global energy supply chains, and strengthen ties between American and Qatar-based energy giants.