On January 14, 2026, the U.S. Court of Appeals for the Fifth Circuit affirmed the Texas Commission on Environmental Quality’s decision to grant a third construction-commencement extension for the Texas LNG liquefied natural gas terminal proposed for Brownsville. The ruling rejected a challenge brought by the South Texas Environmental Justice Network, which had argued that the agency should have processed the request under broader state permitting rules rather than the NSR-specific extension provisions.
The decision provides important confirmation for project developers that the targeted framework in 30 Tex. Admin. Code §116.120 governs extensions of construction deadlines, rather than the more expansive procedures in Chapter 50 that would require renewed public notice and a new technical review. Had STEJN prevailed, the project would have faced significant additional delays and uncertainty.
Texas LNG has sought multiple extensions as the multibillion-dollar project encountered litigation and market-related setbacks. The original permit required construction to begin by November 12, 2021. TCEQ first extended the deadline to May 13, 2023, and again to November 12, 2024. With litigation still pending, the company requested a third extension to May 12, 2026, which TCEQ approved after determining that the project met the financial-commitment threshold required by the rules.
This challenge highlights several practical considerations for project developers:
The core dispute centered on whether a third extension request constitutes an “application” under 30 TAC Chapter 50, which would trigger technical review, draft-permit preparation and public comment. STEJN maintained that those procedures were mandatory. TCEQ countered that the Legislature created a specialized mechanism for NSR extensions in §116.120 that operates independently of Chapter 50.
The Fifth Circuit agreed with the agency, relying on the principle that specific regulations control over general ones when both could apply. The court found that §116.120 sets out a self-contained process for evaluating extensions and does not require reopening the underlying permit.
The panel also rejected STEJN’s contention that the emissions demonstration required for a second extension must be repeated for a third. Nothing in the text, the court said, imports that requirement into subsection (c).
Even assuming such a showing were necessary, the court observed that substantial evidence supported TCEQ’s decision. Texas LNG demonstrated that the original best available control technology determinations remained valid, that the project continued to qualify as a minor source, and that it complied with the more stringent PM2.5 significant impact level adopted shortly before the agency acted.
The ruling is expected to have implications beyond the Texas LNG terminal. Many large infrastructure projects rely on phased financing and are vulnerable to delays caused by litigation, supply-chain constraints and federal policy shifts. By affirming the streamlined extension pathway, the court preserved a key tool for keeping such projects viable.
Environmental groups, meanwhile, are likely to continue scrutinizing extension requests as potential leverage points. The decision underscores that while the NSR rules provide flexibility, developers must still meet precise financial-commitment standards and maintain up-to-date technical analyses.
For Texas LNG, the decision clears one of the final procedural hurdles as the company works toward a final investment decision. Whether construction will begin before the new May 2026 deadline will depend on market conditions and the resolution of remaining legal challenges.
Originally reported by Madeleine Boyer, Lisa Dyar, Laura L. LaValle, Beveridge & Diamond PC - Client Alert--Beveridge and Diamond in The National Law Review.
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