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12 Oct 2023

Venture Global Seeks to Commence Some Service at Louisiana Calcasieu LNG Plant

12 Oct 2023  by reuters   

A liquefied natural gas (LNG) tanker is tugged towards a thermal power station in Futtsu, east of Tokyo, Japan November 13, 2017. REUTERS/Issei Kato/File Photo Acquire Licensing Rights
U.S. liquefied natural gas (LNG) company Venture Global LNG asked federal energy regulators for permission to commence service of liquefaction blocks 7-9 at its Calcasieu Pass LNG export plant in Louisiana.

The startup of commercial service at that plant is the subject of several disputes between Venture Global and some of its customers, including units of European energy firms Shell (SHEL.L), BP (BP.L), Edison (EDNn.MI) and Repsol (REP.MC).

Some of Venture Global's customers have filed arbitration cases claiming Venture Global unfairly deprived them of billions of dollars of cargoes that Venture Global has sold while the plant was still in commercialization, or test mode, since March 2022.

The move does not mean Venture Global customers will immediately have access to cargoes as significant repair and commissioning work remains, said the company's spokesperson Shaylyn Haynes.

"Blocks put in service at FERC does not yet mean the entire facility is commercially operable or has achieved the commercial operations date," said Haynes in an email on Wednesday .

In its filing on Tuesday, Venture Global told the U.S. Federal Energy Regulatory Commission (FERC) that it produced first LNG in blocks 7A, 7B, 8A and 8B in June 2022 and blocks 9A and 9B in July 2022.

The move to have the processing plants put into service is an incremental step to full commercial operations, said Haynes.

"Significant repair and commissioning work remains, and our team is working hard to complete the rest of the plant as quickly as possible,” said Haynes.

Venture Global's request to FERC appears to show the company is preparing to enter the blocks to commercial operations, said Jason Feer, global head of business intelligence at LNG shipping and brokering firm Poten & Partners.

"The big question is does this mean that they will be delivering cargoes to their customers?" Feer asked.

There are 18 modular liquefaction trains configured in nine blocks at Calcasieu. Each block can produce about 1.3 million metric tons per annum (MTPA) of LNG, or 0.2 billion cubic feet per day (bcfd) of natural gas.

Analysts have estimated it cost about $4.5 billion to build Calcasieu.

In total, Venture Global has about 70 MTPA of LNG export capacity in operation, construction or development in Louisiana, including the 10-MTPA Calcasieu (operation), 20-MTPA Plaquemines (construction), 20-MTPA Delta (development) and 20-MTPA CP2 (development).

Venture Global is building the $8.5 billion Plaquemines project, which is on track to produce first LNG in 2024, and started early site work on CP2 in the spring of 2023.

CP2 will be built next to the Calcasieu plant.

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