Plaquemines LNG Terminal

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Plaquemines LNG Terminal is a proposed LNG terminal in Louisiana, United States. The project's sponsor Venture Global reached a final investment decision (FID) for Phase 1 in May 2022.

Location

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Project Details

Phase 1 (Trains 1–18)

• Owner: Venture Global Plaquemines LNG, LLC
• Operator: Venture Global LNG, LLC
• Parent Company: Venture Global LNG
• Location: Plaquemines Parish, Louisiana, United States
• Coordinates: 29.600411, -89.886404 (exact)
• Type: Export
• Trains: 18 trains (2 trains per block, and 9 blocks per phase)
• Capacity: 13.33 mtpa (0.74 mtpa per train)
• Cost: US$13.2 billion (Phase 1 and Gator Express Gas Pipeline)
• Financing: Initial US$500 million loan from Bank of America, JPMorgan Chase, Mizuho and Morgan Stanley (Phases 1 and 2)
• Status: Construction
• FID Status: FID (2022)
• Start Year: 2024
• Associated Infrastructure: Gator Express Gas Pipeline

Phase 2 (Trains 19–36)

• Owner: Venture Global Plaquemines LNG, LLC
• Operator: Venture Global LNG, LLC
• Parent Company: Venture Global LNG
• Location: Plaquemines Parish, Louisiana, United States
• Coordinates: 29.600411, -89.886404 (exact)
• Type: Export
• Trains: 18 trains (2 trains per block, and 9 blocks per phase)
• Capacity: 10 mtpa (0.56 mtpa per train)
• Cost: US$7.8 billion (Phase 2)
• Financing: Initial US$500 million loan from Bank of America, JPMorgan Chase, Mizuho and Morgan Stanley (Phases 1 and 2)
• Status: Proposed
• FID Status: FID (2023)
• Start Year: 2026
  • Formerly 2025
• Associated Infrastructure: Gator Express Gas Pipeline

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Venture Global's Plaquemines LNG Terminal is a proposed LNG terminal in Louisiana, United States. The 632-acre site is located on the Mississippi River.

Construction was expected to begin in 2018. The company is also proposing the construction of two natural gas pipelines to connect existing pipelines to the site, including the Gator Express Gas Pipeline.

In July of 2017, the project received approval from the Department of Energy (DOE) to export LNG to Free Trade Agreement nations. In October of 2019, the project received approval from the Department of Energy (DOE) to export up to 3.4 billion cubic feet per day (Bcf/d) to non-Free Trade Agreement nations.

In September of 2019, the project received full Federal Energy Regulatory Commission (FERC) approval. FERC also approved the associated Gator Express Gas Pipeline system, which is intended to bring natural gas from existing pipelines to the new facility in Plaquemines Parish.

In April 2020, the energy and shipping brokerage Poten & Partners disclosed that the final investment decision (FID) for the terminal had been delayed beyond the original FID timing of 2020. It cited COVID-19, plunging demand and the crash in oil prices as the reasons for the delay.

In February 2021, with the securing of initial project financing, Venture Global LNG said that it expected to reach FID by mid-2021, with construction also expected to start before the end of the year. Thereafter the first liquefaction unit would be expected to enter service in 2024 with the project projected to be fully operational in 2025.

Although FID had not been reached, very initial construction activities were reported to have started at the project site also in September 2021.

In May 2022, Venture Global announced that it would be taking FID on the first phase of the project after closing US$13.2 billion in financing from a syndicate of banks led by Bank of America, Goldman Sachs, ING, JP Morgan, Mizuho, Morgan Stanley and RBC.

In January 2023, Venture Global received FERC approval to increase the capacity of the project a further 3 mtpa through operational efficiency.

In March 2023, Venture Global announced a positive FID on the second phase of the project with US$7.8 billion in financing, and issued a full notice to contractor KZJV to proceed with construction of the facility. According to GIIGNL, customers of the Plaquemines LNG project include CNOOC, Chevron, China Gas, EDF, EnBW, Excelerate Energy, ExxonMobil, New Fortress Energy, Orlen, Petronas, Shell and Sinopec.

In October 2023, 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.

In October and November 2023, Venture Global closed US$4 billion and US$1 billion in senior notes offerings, respectively.

In June 2024, the US Pipeline and Hazardous Materials Safety Administration (PHMSA) approved an uprate at Plaquemines LNG that would increase peak liquefaction capacity from 24 to 27.2 mtpa. According to Venture Global, the uprate will come as a result of “minimal possible downtime, rich feed gas composition, optimal ambient temperatures, and ideal design margins.”

As of June 2024, the annual GIIGNL reported that production from the first phase of Plaquemines LNG was expected in August 2024.

Contracts

In June of 2019, the company struck a deal with PGNiG to buy 2.5 million tons per annum (mtpa) of liquefied natural gas from the yet-to-be-built Plaquemines terminal, up from 1 mtpa in an earlier agreement, suggesting that the project is still proceeding.

In April 2020, Venture Global Plaquemines LNG LLC and Electricite de France SA (EDF) entered into a 20-year sales and purchase agreement (SPA) for 1 mtpa. Under this agreement, EDF will purchase LNG on a free onboard basis for a 20-year term starting from the commercial operation date of the export facility.

In September 2021, Venture Global and Poland's PGNiG amended their existing sales and purchase agreement and increased the volume of LNG purchased from Plaquemines LNG to 4 mtpa for 20 years on a free-on-board basis. Taken together with the 1 mtpa contract agreed with EDF in 2020, Plaquemines has half of its First Phase's 10 mtpa capacity under contract.

In December 2021, Venture Global signed two gas export contracts with China's CNOOC Gas & Power Group Co, one of which for 2 mtpa over 20 years from Plaquemines LNG.

In March 2022, Venture Global announced that Shell had signed a contract to purchase 2 mtpa LNG for 20 years from the Plaquemines facility. Later that month Venture Global announced that New Fortress Energy had agreed to purchase 1 mtpa from the facility for 20 years.

In May 2022, Venture Global announced two sales and purchase agreements. ExxonMobil LNG Asia Pacific agreed to purchase 1 mtpa of LNG for an unspecified, long-term duration, and the Malaysian state-owned oil and gas company Petronas agreed to purchase 1 mtpa of LNG for 20 years.

In June 2022, Venture Global announced a sales and purchase agreement with Chevron under which it will sell 2 mtpa split between Plaquemines LNG and its proposed CP2 LNG Terminal. Venture Global also announced a deal with the German utility EnBW Energie Baden-Wuerttemberg AG, which will buy 1.5 mtpa for 20 years starting in 2026. Venture Global did not specify whether this supply will come from Plaquemines LNG or one of Venture Global's other projects. In October 2022, Venture Global and EnBW increased the terms of the contract from 1.5 mtpa to 2 mtpa.

In February 2023, Venture Global signed two SPAs with China Gas, which agreed to purchase 1 mtpa each from Plaquemines LNG and CP2 LNG Terminal for a period of 20 years. The same month, Venture Global sealed an SPA with Excelerate Energy for 0.7 mpta LNG over 20 years.

In June 2024, Venture Global and Ukraine's DTEK signed a non-binding heads of agreement (HOA) for DTEK to purchase up to 2 mtpa LNG from Plaquemines LNG for 20 years, beginning some time between the end of this year and 2026. Ukraine does not have LNG import terminals, and Venture Global's statement does not indicate exactly where the LNG would go in the region.

Carbon capture and storage facility

In May 2021, Venture Global LNG announced that it plans to capture and sequester carbon at both its Plaquemines LNG Terminal and Calcasieu Pass 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 Plaquemines and Calcasieu. 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."

Financing

A US$500 million loan to partly pay for construction of the terminal was agreed with Bank of America, JPMorgan Chase, Mizuho and Morgan Stanley in February 2021.

A bank syndicate led by Bank of America, Goldman Sachs, ING, JP Morgan, Mizuho, Morgan Stanley and RBC provided US$13.2 billion in financing to develop Phase 1 of the facility.

Phase 2 of the project was financed by BBVA, Banco Santander, Bank of America, Bank of China, Caixa Bank, Deutsche Bank, Goldman Sachs, ICBC Standard, ING, J.P. Morgan Chase, LBBW, Mizuho, MUFG, Natixis, Royal Bank of Canada, Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia, Wells Fargo Bank, National Bank of Canada, KfW Ipex-Bank, Helaba, DZ Bank and Regions Bank.

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.

Articles and resources

A June 2022 report on the potential impacts of Plaquemines LNG was published by the organizations Sierra Club and Healthy Gulf that urges the U.S. Federal Energy Regulatory Commission (FERC) agency to deny the facility's request to produce an additional 3.2 mtpa of fracked gas. The organizations argue that FERC must prepare a new Environmental Impact Statement (EIS) that fully analyzes the facility's potential impact on the environment, climate, and environmental justice communities during its construction.