Venture Global LNG expects extended start-up at second plant
(Reuters) - A Venture Global LNG export plant due to begin operating in 2024 will undergo a lengthy startup similar to its Calcasieu Pass LNG facility, with customers likely to receive their first cargoes in 2026 at the earliest, Chief Executive Mike Sabel told Reuters.
The nearly three-year commissioning at Calcasieu Pass prevented its original backers from obtaining any of the liquefied natural gas (LNG) cargoes shipped and has stirred a firestorm of accusations and arbitration claims from those customers.
The new Plaquemines LNG plant, which sits 20 miles (32km) south of New Orleans along the Mississippi River, includes some of the same customers that fiercely protested their inability to obtain their cargoes from Calcasieu Pass.
Asked whether Plaquemines' commissioning period would be as extended as the Calcasieu Pass plant's nearly 36 months, Sabel said "absolutely."
"Keep in mind our total timeline from FID (financial investment decision) to COD (commercial operation date) is shorter than most of the world," he added.
The earliest date that first cargoes are available to long-term contract customers is 2026 or 2027, but Venture Global expects to sell commissioning cargoes in 2024.
Venture Global LNG has said its contracts give it sole authority to determine when a facility is commercial.
The company has said equipment problems at the first plant have prevented it from reaching full commercial production, allowing it to withhold cargoes from big name contract customers including BP, Edison, Repsol, Shell and others, and sell them as commissioning cargoes.
Customers claim Venture Global LNG has deprived them of tens of billions of dollars in LNG sales at a time when global prices were much higher than what they were promised. Sabel said the companies knew Venture Global's use of a modular approach to the plant's design would lead to a lengthy commissioning.
"Just signing a contract, especially when it is at a spectacularly lower price, doesn't lead to easy capital," Sabel said, pushing back at customers who argue their contracts helped get the projects financed.
Poland's state energy company Orlen, which has agreements to acquire a combined 5.5 million metric tons per annum (MTPA) of LNG from the two facilities, said it would "take measures appropriate to the situation," if it does not receive its first Plaquemines cargo as promised in 2026.
China Gas, which agreed to buy 1 MTPA from Plaquemines, is unaware of an extended period facing the Plaquemines startup. It expects to receive its first gas from the project in early 2027 under its contract, a representative said.
Shell "would never entertain a contract that allowed for commissioning to be extended for an undetermined amount of time," said a spokesperson. Chevron, France's EDF and New Fortress Energy, three other Plaquemines contract holders, declined to comment.
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