Venture Global is ready to start feeding natural gas into its second LNG plant, Plaquemines, which is one of the last steps towards full-scale production.
In a filing, the company said it was ready to start pumping gas to the last block at Plaquemines LNG more than two years ahead of schedule. In its latest request to the Federal Energy Regulatory Commission, Venture Global asked for and received an extension to the original deadline, to the end of 2027.
This means that Venture Global can start servicing its long-term contracts in two years. In the meantime, however, clients worry it would sell LNG on the spot market for higher prices. Plaquemines clients fear a repeat of what Venture Global did with its first LNG plant, in Calcasieu Pass, where it delayed the official commissioning of the facility for years, while selling LNG produced there on the spot market.
The move, made possible by a legal loophole that allowed Venture Global to delay honoring its long-term contracts only after the plant as officially commissioned, prompted a flurry of lawsuits by clients including Shell, BP, Eni, and Repsol.
To quell the concerns, Venture Global recently wrote to its long-term buyers to assure them that it would honor its contracts. The assurances, however, followed the sale of as many as 100 LNG cargos from Plaquemines, the Financial Times reported earlier this month. This fact should have automatically put the contractual obligations of the LNG producer into effect, the publication said.
While the long-term buyers of LNG from the Plaquemines facility worry for their cargoes, an arbitration court ruled on two of the half a dozen lawsuits brought against Venture Global by long-term clients of its first LNG plant, in Calcasieu Pass. The court sided with Venture Global on one of these, brought against it by Shell, but on the second, by BP, it ruled in favor of the plaintiff, sparking fear among Venture Global investors the company would be saddled with a substantial compensation bill.
By Irina Slav for Oilprice.com
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