Calcasieu Pass LNG Terminal
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Calcasieu Pass LNG Terminal is an operating LNG terminal in Cameron Parish, Louisiana, United States.
Location
Project details
- Owner: Venture Global Calcasieu Pass, LLC[1][2]
- Operator: Venture Global Calcasieu Pass, LLC[3][2]
- Parent: Venture Global LNG[1]
- Location: Cameron Parish, Louisiana, United States
- Coordinates: 29.77292736, -93.3343038 (exact)
- Capacity: 12 mtpa[4][5]
- Status: Operating[6] (although still technically in the commissioning phase)
- Type: Export[5]
- Trains: 18[4]
- Cost: US$7.1 billion ($1.3 billion equity, $5.8 billion in loans)[7]
- Formerly US$4.5 billion[8]
- Financing: US$2 billion equity investment from Venture Global LNG and Stonepeak Infrastructure Partners; US$5.7 billion in loans from a consortium of international banks;[9] US$220 million debt facility from Morgan Stanley;[10] US$2.5 billion bond issue with participation from 13 international commercial banks[11]
- Start year: 2022[6]
*Note the project's website says 0.626 mtpa per train as of May 2022.[1]
Background
Calcasieu Pass LNG Terminal is a proposed LNG terminal in Louisiana, United States.[12] The facility would be located in Cameron Parish, Louisiana, south of Lake Charles. [13] Originally, construction was expected to start in 2019 with full commencement of operations in the last quarter of 2019.[14] However, it wasn't until February of 2019 that Venture Global Calcasieu Pass received authorization from the Federal Energy Regulatory Commission (FERC) to construct the export facility in Cameron Parish and the associated TransCameron Pipeline.
The project has binding 20-year sale and purchase agreements with Shell, BP, Edison S.p.A., Galp, Repsol and PGNiG, representing 8 million mt/year of the terminal's total planned 10 million mtpa of offtake under long-term agreements. Venture Global has said it expects that it will contract the remaining 2 million mt/year of capacity before the completion of construction.[15] As intended, construction began in February 2020.[16] Analysts have forecasted that the terminal could start producing LNG in test mode by late 2021.[8]
In December 2021, FERC approved Venture Global LNG to begin commissioning liquefaction systems at the second block, having approved the first block in November 2021.[4] The terminal was initially scheduled for a potential operational date in 2021[17], though this was later amended to 2022.[4]
Also in December 2021, FERC issued a notice that Venture Global had requested to increase the total peak achievable liquefaction capacity from 12 mtpa to 12.4 mtpa.[18]
LNG production at the Calcasieu Pass Terminal started on January 19, 2022, and as of February 2022, four blocks (each with two trains) were cleared for commissioning.[19][20]
According to the IGU World LNG report - 2022 Edition, trains 1–12 (summing to 7.5 mtpa of capacity) came online in March 2022. The July report goes on to say that the remaining six trains (T13–T18), with a total capacity of 3.8 mtpa, are "set to come online by the end of 2022." These terminals would "make the United States the market with the largest operational liquefaction capacity."[21]
Calcasieu Pass came fully online as of May 2022, according to the 2023 IGU World LNG Report. However, the facility did not enter full commercial operation at that time.[6]
As of April 2023, Venture Global is still preparing the facility for full commercial operation, delayed by repairs at a power generation unit in the facility.[22]
An October 2023 article from DeSmog noted that the facility's commissioning period was the longest ever of its kind, currently standing at 19 months. The facility's long commissioning period has allowed the company to sell LNG on the spot market at higher prices than if it had been selling LNG under its long term contracts, which are set to begin once the facility finishes commissioning. "Now, experts say the unprecedented delay raises the possibility that Venture Global is purposefully slow walking the commissioning process and keeping the plant unfit and unclean to make more money," the story notes, adding that four companies that have signed contracts with Venture Global have filed for arbitration.[23]
An October 2023 report from the Institute for Energy Economics and Financial Analysis (IEEFA) found that the facility's speedy construction was responsible for its ongoing issues with commissioning and air pollution. The author Trey Cowan writes, "Calcasieu Pass LNG’s rapid construction reduced construction costs and yielded quick revenues for Venture Global. But Calcasieu Pass LNG still suffers from leaks and excessive flaring due to design flaws. More than 18 months after construction was completed, the company is still trudging through a commissioning phase, working through all the issues that arose from its quick construction." With regard to air pollution, the facility "frequently violated its air permits in 2022," and continues to put local communities in Cameron Parish at risk.[24]
In October 2023, FERC approved of a plan for Venture Global to turn on three processing trains at the facility while work on repairing generation units continued.[25] The same month, a letter to the DOE regarding a change in Venture Global's ownership structure said that Pacific Investment Management LLC (PIMCO) had taken 15.1% of the common equity in VG Holdings, and now indirectly held that ownership share in each of Venture Global's three projects: Plaquemines LNG Terminal, CP2 LNG Terminal, and Calcasieu Pass LNG Terminal.[26]
In February 2024, Venture Global requested from FERC a one-year extension to commission the facility by February 2025 citing ongoing work on the facility's power generation.[27]
According to the 2024 GIIGNL report released in June 2024, "Venture Global states that the facility is experiencing equipment failures and other wearing-in issues that must be resolved before starting commercial operations, currently expected towards the end of 2024."[28]
Carbon capture and storage facility
In May 2021, Venture Global LNG announced that it plans to capture and sequester carbon at both its Calcasieu Pass Terminal and Plaquemines LNG Terminal in Louisiana. This is part of a growing trend among energy firms to reduce greenhouse gas emissions to meet increased customer and government demand for cleaner energy to reduce damage caused by climate change. The carbon capture and storage (CCS) project would compress carbon dioxide at its sites and transport the gas to be permanently stored in subsurface saline aquifers. The company estimates that it will capture and sequester an estimated 500,000 tons of carbon per year from both Calcasieu and Plaquemines.[29] Commenting on the CCS project in June 2021, the company's CEO Michael Sabel said: "We don't need any new technology to do it. We don't need any additional outside funds to do it. We're able to do it as soon as the permitting process allows us to go forward."[8]
Environmental Violations
In June 2023, the Lousiana government ordered Calcasieu Pass LNG to come into compliance with its emission permits. The facility had reported over 138 incidents in which it polluted more than it was permitted.[30] A 2023 report from the Louisiana Bucket Brigade found that the company violated its permit on 83% of the days of its first year of operation (286 of 343 days total).[31] Venture Global could be liable for $32,500 in fines for each day of violating state regulations.[30]
Calcasieu Pass had also violated its sulfur dioxide emissions cap over three months last year, which the company failed to disclose as quickly as required by state regulations.[30]
Financing
In May 2019, Venture Global LNG Inc. received a US$1.3 billion equity investment from Stonepeak Infrastructure Partners to fund construction of the terminal.[32]
In August 2019, the project reached financial close on US$5.77 billion in loans from a consortium of international private banks including Goldman Sachs, JPMorgan Chase, Mizuho, Santander and Sumitomo Mitsui Banking Corporation.[9] The project received an additional US$220 million debt facility from Morgan Stanley to be used to finalise engineering work and commence site construction activity.[10]
Part of a US$500 million loan from Bank of America, JPMorgan Chase, Mizuho and Morgan Stanley which Venture Global LNG secured in February 2021 was reported to be going to the Calcasieu Pass project.[33]
In August 2021, Venture Global LNG completed a US$2.5 billion bond offering, the proceeds of which are principally to prepay certain amounts outstanding under its existing loans for the project. The bonds are guaranteed by TransCameron Pipeline, an affiliate of Venture Global Calcasieu Pass.[34] The participating banks in the bond issue were Morgan Stanley, JP Morgan, Bank of America Merrill Lynch, Goldman Sachs, ING, Mizuho, Natixis, Nomura, Royal Bank of Canada, Santander, Scotia Capital, SMBC Nikko Securities and Industrial and Commercial Bank of China.[11]
In May 2023, Venture Global closed a US$4.5 billion offering of senior secured notes. LNG Prime reported, "The notes have been issued in a series of 8.125 percent senior secured notes due 2028 in an aggregate principal amount of $2.25 billion, and a series of 8.375 percent senior secured notes due 2031 in an aggregate principal amount of $2.25 billion." The senior secured notes are affiliated with Venture Global and not any particular LNG terminal.[35]
In October and November 2023, Venture Global closed US$4 billion and US$1 billion in senior notes offerings, respectively.[36][37]
Articles and resources
References
- ↑ 1.0 1.1 1.2 "Calcasieu Pass Facility • Venture Global LNG". Venture Global LNG. Retrieved 2022-04-14.
- ↑ 2.0 2.1 International Group of Liquefied Natural Gas Importers (May 24, 2022). "Annual Report 2022 Edition" (PDF). GIIGNL. Retrieved July 11, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ U.S. Liquefaction Capacity. EIA. Accessed May 2020.
- ↑ 4.0 4.1 4.2 4.3 "U.S. approves Venture Global La. Calcasieu 2 LNG plant commissioning". Nasdaq. Retrieved 2021-12-14.
{{cite web}}: CS1 maint: url-status (link) - ↑ 5.0 5.1 5.2 5.3 U.S. Liquefaction Capacity, Energy Information Administration, November 3, 2020
- ↑ 6.0 6.1 6.2 IGU. 2023 World LNG Report. July 2023.
- ↑ "Venture Global Announces Final Investment Decision and Financial Close for Calcasieu Pass LNG • Venture Global LNG". Venture Global LNG. Retrieved 2023-10-12.
- ↑ 8.0 8.1 8.2 Scott DiSavino, Venture Global can build Louisiana carbon capture after getting permits, Reuters, Jun. 23, 2021
- ↑ 9.0 9.1 Calcasieu Pass LNG, IJGlobal, accessed Jun. 4, 2020
- ↑ 10.0 10.1 Calcasieu Pass LNG Bridge Facility, IJGlobal, Sep. 30, 2019
- ↑ 11.0 11.1 Calcasieu Pass LNG & Carbon Capture and Storage Bond Facility 2021, IJGlobal, accessed Sep. 22, 2021
- ↑ Calcasieu Pass LNG Export Terminal Project, A Barrel Full, 14 January 2015
- ↑ Calcasieu Pass, Venture Global LNG, Accessed 21 May 2017
- ↑ Venture Global LNG raises $55 million, LNG World News, 4 May 2016
- ↑ Harry Weber, Forward spreads point to further upside for early startup of new US LNG capacity, S&P Global, May 24, 2021
- ↑ Venture Global tests Calcasieu Pass LNG compression system Oil & Gas Journal, Apr. 3, 2020
- ↑ Harry Weber, Louisiana Calcasieu Pass LNG terminal could ship first cargo in late 2021: Venture Global, S&P Global, Mar. 18, 2021
- ↑ "Venture Global Calcasieu Pass, LLC; Notice of Application To Amend and Establishing Intervention and Protest Deadline". Federal Register. Retrieved 2022-05-05.
{{cite web}}: CS1 maint: url-status (link) - ↑ Marcy de Luna, Venture Global LNG's Calcasieu Pass plant begins production in Louisiana, Reuters, Feb. 4, 2020
- ↑ "Venture Global gets OK on 4th LNG block at Louisiana Calcasieu plant". Reuters. 2022-02-08. Retrieved 2022-04-14.
- ↑ "World LNG Report 2022". International Gas Union. July 6, 2022. Retrieved July 11, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ GIIGNL. The LNG Industry: GIIGNL Annual Report 2023. July 14, 2023.
- ↑ Sara Sneath (2023-10-03). "Is Venture Global's Louisiana LNG Plant Profiting from Pollution?". DeSmog. Retrieved 2023-10-05.
- ↑ "Calcasieu Pass LNG: Unreliable operations result in excessive pollution and profits". ieefa.org. Retrieved 2024-05-21.
- ↑ Reuters. "Venture Global LNG can start new units at LNG plant, says FERC." October 26, 2024.
- ↑ Latham & Watkins LLP. Venture Global LNG, Inc. Notification of Change in Ownership Structure. October 24, 2023.
- ↑ Staff, LNG Prime (2024-02-19). "Venture Global seeks more time to complete Calcasieu Pass LNG terminal". LNG Prime. Retrieved 2024-05-21.
- ↑ GIIGNL. The LNG Industry: GIIGNL Annual Report. June 2024.
- ↑ Venture Global Launches Carbon Capture and Sequestration Project, Venture Global LNG press release, May 27, 2021
- ↑ 30.0 30.1 30.2 WWNO. Amid expansion plans, Venture Global LNG plant faces compliance order after 100+ violations. July 25, 2023.
- ↑ Louisiana Bucket Brigade. Analysis of Emissions Monitoring Reports. Accessed August 2023.
- ↑ Stonepeak invests $1.3 billion in Calcasieu Pass LNG Oil and Gas Journal, May 28, 2019
- ↑ Two LNG export projects move forward in the United States, Enerdata, Feb. 15, 2021
- ↑ Venture Global Announces Closing of $2,500,000,000 Senior Secured Notes by Venture Global Calcasieu Pass, LLC, Venture Global LNG press release, Aug. 5, 2021
- ↑ LNG Prime Staff (2023-05-29). "Venture Global LNG wraps up $4.5 billion senior notes offering". LNG Prime. Retrieved 2023-09-06.
- ↑ Staff, LNG Prime (2023-10-25). "Venture Global LNG completes $4 billion senior notes offering". LNG Prime. Retrieved 2024-07-08.
- ↑ Staff, LNG Prime (2023-11-09). "Venture Global LNG wraps up $1 billion senior notes offering". LNG Prime. Retrieved 2024-07-08.
