Key facts
- The U.S. Maritime Administration (MARAD) has licensed Delfin Midstream to build the first floating LNG export terminal in U.S. waters.
- The $5 billion project will be located approximately 40 nautical miles off the coast of Louisiana.
- The terminal aims to begin exports between 2029 and 2030, with nearly 90% of its capacity already under long-term sale and purchase agreements.
- Major investors include Global Infrastructure Partners, Mitsui O.S.K. Lines, and Vitol, with MUFG arranging significant financing.
- Environmental groups and local advocates have expressed opposition, citing concerns over climate impact and safety.
The United States, already the world's largest exporter of liquefied natural gas (LNG), is set to construct its first floating LNG export terminal in federal waters off the coast of Louisiana. The U.S. Maritime Administration (MARAD) has issued a license to Delfin Midstream for the $5 billion project, which aims to leverage existing offshore infrastructure and expedite export capabilities.
The Delfin LNG project, initially approved in 2017 but facing regulatory hurdles and a brief pause on LNG export permits by the Biden administration in early 2024, will feature the largest floating LNG vessel globally. It will connect four floating liquefaction units to underutilized subsea pipelines, including the repurposed UTOS pipeline, to transport gas from the mainland grid. Samsung Heavy Industries has secured a $2.9 billion contract to build the FLNG 1 vessel.
First LNG production and exports are targeted to commence between 2029 and 2030, following a Final Investment Decision expected on June 3, 2026. The initial vessel is designed for an export capacity of 4.4 million tonnes per year, with nearly 90% of this capacity already committed through long-term sale and purchase agreements with major global energy companies. Key financial backing comes from Global Infrastructure Partners (a division of BlackRock), Japanese shipping firm Mitsui O.S.K. Lines, and global energy trader Vitol, with MUFG arranging a $3.6 billion financing package.
Floating LNG (FLNG) terminals offer advantages in speed, cost-effectiveness, and locational flexibility compared to traditional land-based plants, with development times typically ranging from 1 to 3 years. They also allow for the extraction of natural gas from remote offshore fields and generally have a lower environmental footprint, often utilizing recycled LNG carriers. However, the Delfin project has faced opposition from environmental groups and local advocates, who cite concerns over inadequate environmental reviews, climate threats, impacts on local fishing communities, and safety risks, particularly following a recent pipeline explosion that had previously delayed the project.