Venture Global LNG's second plant running over budget, document shows
- Plaquemines LNG costs are $2.35 B over budget, document says
- Company expects pre-commercial cargoes to offset higher cost
- Initial plant to cost $9.8 B after repairs completed
Venture Global LNG's second liquefied natural gas (LNG) export plant, currently under construction in Louisiana, is $2.35 B over budget and costs could still rise, according to financial documents prepared for its initial public offering of shares.
The fast-growing LNG exporter blamed inflationary pressures and costs to keep construction on schedule. The ultimate cost of the Plaquemines LNG facility was projected to reach $21 B–$22 B, documents viewed by Reuters show.
The 20-metric MMtpy export facility likely will start producing superchilled gas in the coming weeks. It could be one of two new U.S. LNG plants to start operations this year.
Soaring costs for labor, steel and processing equipment have U.S. LNG developers suffering budget overruns and, in some cases, running well behind initial completion schedules.
The Golden Pass LNG joint venture between QatarEnergy and ExxonMobil was more than $2 B over budget and a year behind schedule when is lead contractor Zachry Holdings field for bankruptcy and exited the project earlier this year. Operations may begin late next year or early 2026.
Venture Global has covered the $2.35-B cost overrun and feels it should have enough cash, borrowing capacity and "access to sufficient commissioning cargoes proceeds" to meet further increases, the preliminary IPO documents showed.
The company has said Plaquemines will have a similar commissioning period to its Calcasieu Pass LNG facility, with contract customers likely to receive their first cargoes in 2026 at the earliest, Venture Global LNG CEO Mike Sabel told Reuters in an interview late last year.
Founded 11 years ago by an energy lawyer and investment banker, the company has quickly become a major exporter of LNG, competing against larger rivals Cheniere Energy, Freeport LNG and Sempra.
Contract disputes. Venture Global's Calcasieu Pass 10-MMtpy facility is now expected to cost $9.8 B, inclusive of the repairs to faulty heat recovery steam generator that delayed full commercial operation, the documents show.
Venture Global expects to spend another $343 MM to complete the repairs, according to its consolidated balance sheet.
The company is embroiled in contract disputes over the plant startup with bp, Shell, Edison and Orlen that could cost it hundreds of millions of dollars.
Venture Global has been commissioning Calcasieu Pass since March 2022 and has sold its commissioning cargo on the spot market earning operating profits of $8.4 B between March 2022 and December 2023, documents show.
Related News
Related News
- Japan's Mitsubishi to acquire stake in Petronas LNG plant
- McDermott awarded Rovuma LNG Phase 1 FEED contract in Mozambique
- bp, CMA CGM, GTT join methane abatement group MAMII
- Wood leads industry project to accelerate CCUS with guidelines for CO2 specifications
- Fincantieri LNG-powered Star Princess launched in Monfalcone
- Picarro launches handheld solution for natural gas leak investigation and closed-loop leak management
- Fincantieri LNG-powered Star Princess launched in Monfalcone
- Sonatrach, Saudi Aramco raise prices for LPG by 3%–4% in October
- Amarinth secures $1-MM order of API 610 pumps for Coral North FLNG project in Mozambique
Comments