Venture Global on track to become top U.S. LNG company if CP2 project approved
- Venture Global could top Cheniere to become largest U.S. LNG company
- Producing at higher rates than initially expected
- Plans to sell additional volumes on long-term contracts
Venture Global is poised to become the largest U.S. liquefied natural gas company by next year if it proceeds with its CP2 project in Louisiana and continues overproduction at its existing plants, according to LSEG data and company statements.
Only a startup three years ago, Venture Global currently has a combined capacity to produce 38.5 metric MMtpy of LNG from its two operational plants in Louisiana, LSEG data show.
That could surge to 66.5 MMtpy after it approves and completes construction of its latest project, the 28-MMtpy CP2 plant, also in Louisiana.
That would put the company ahead of rival Cheniere Energy's LNG.N expected 60 MMtpy of capacity by that time.
"The fact that they can have two plants operating and a third close to FID (final investment decision) in three years is testimony to the speed with which they have moved," said Jason Feer, Poten and Partners business intelligence chief.
Venture Global has been able to leapfrog its rivals in size mainly by building plant components quickly in factories outside the U.S. and then putting them together on its U.S. sites in record time, Feer said.
Rapidly rising LNG production in the past few years has made the U.S. the world's top exporter of LNG.
Higher-than-expected production. Venture Global has also been able to produce more from its plants than it initially expected, the company's CEO Mike Sabel told an earnings call last week.
The company initially expected to produce 10 MMtpy at its first plant, Calcasieu Pass, and 20 MMtpy at Plaquemines, which is now ramping up and in the process of commissioning.
Those capacities have now been revised up to 12 MMtpy at Calcasieu Pass and 26.5 MMtpy at Plaquemines, the company said.
"Since we started ramping up Plaquemines...the facility is producing really significantly above what our upper range of expectations were on production capacity...the 140% that we've been talking about," Sabel said on the earnings call.
The CP2 project was initially proposed at 20 MMtpy, but the company revised that up to 28 MMtpy.
Without that increase in size, Cheniere would narrowly retain the top spot, at least into 2026. Cheniere did not respond to questions about it potentially losing its status as the largest U.S. LNG producer.
Venture Global has earned billions of dollars trading LNG cargoes on the spot market during long commissioning periods rather than selling them on long-term contracts at lower liquefaction fees.
The company faced criticism and contract arbitration cases for doing so from customers including Shell, bp and Repsol at its first plant, Calcasieu Pass, which in April finally started commercial operations.
The company has, however, decided to seek long-term contracts for some of the roughly 15 MMtpy of extra LNG output.
"So, we are intending to do more 20-year contracts than we had been planning and which we're excited about," Sabel told the earnings call.
The company will also be offering more shorter-term volumes, Venture Global spokesperson Shaylyn Hynes said.
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