Environmental Groups Can't Sue, Clearing Path for First U.S. Offshore LNG Project
A federal appeals court has dismissed a legal challenge against the U.S. Maritime Administration's (MARAD) license for the Delfin LNG deepwater port. The court ruled that the environmental groups involved did not demonstrate they had the legal grounds to pursue the case.
In a ruling issued on Wednesday, the Fifth Circuit Court of Appeals rejected a request for review from three environmental organizations that contested MARAD's license issuance. The court did not engage with the environmental claims directly, stating that the groups failed to prove any specific harm linked to the project.
This decision eliminates another legal challenge for the Delfin LNG project, which aims to be the first floating liquefied natural gas export facility in U.S. waters.
The Justice Department, which represented the federal government in this case, celebrated the ruling as a win for the energy policy of the Trump administration.
Adam Gustafson, a top official at the Justice Department's Environment and Natural Resources Division, stated, “This project is an important part of the President’s energy dominance agenda." He mentioned that the ruling would hinder environmental groups "who have no stake in crucial energy projects" from obstructing U.S. energy initiatives.
Maritime Administrator Stephen Carmel supported the decision, saying it ensures that the project "won't be derailed" and allows MARAD to continue promoting offshore energy infrastructure.
The legal challenge was driven by the project's lengthy permitting process. MARAD first approved the deepwater port in 2017. In 2024, the Biden administration required further environmental assessments and chose not to grant the license. However, in January 2025, President Trump instructed the agency to reconsider this decision, resulting in MARAD issuing the license in March 2025.
This ruling comes shortly after Delfin made a final investment decision for the first phase of the project, committing about $5 billion for its first floating LNG vessel, Delfin FLNG 1, with support from investors like Global Infrastructure Partners, Mitsui O.S.K. Lines (MOL), Vitol, and Diameter Capital Partners.
Situated approximately 40 miles off the coast of Louisiana, the project will utilize floating liquefaction vessels connected to current offshore pipeline systems, avoiding the need for a traditional onshore export terminal. The initial vessel is expected to have an annual export capacity of 4.4 million tonnes of LNG, with production set to kick off in 2030.
In total, the project plans to feature three floating LNG vessels at full capacity, with a combined export potential of around 13.2 million tonnes per year, or about 1.8 billion cubic feet of natural gas per day, making it one of the largest floating LNG projects globally.