Venture Global's CP2 LNG project in Louisiana gets final approval from US FERC

Venture Global won final approval from the US Federal Energy Regulatory Commission to build its proposed CP2 LNG export terminal, paving the way for a final investment decision on the first 14.4 million mt/year phase of the Louisiana project.

The developer had said earlier in May that it expected to reach an FID on the first phase by mid-year once it got the necessary approval from FERC.

"Venture Global applauds the Commission and FERC staff for their continued work to advance critical U.S. energy projects like CP2 LNG," Venture Global CEO Mike Sabel said in a statement. "With all federal approvals now in hand we look forward to immediately launching on-site construction on this project that will deliver reliable low-cost LNG to the world, starting in 2027."

A finding in FERC's new order bolstered the project's ability to advance to construction promptly. The commission agreed with the developer that neither a presumptive stay nor FERC's rules restricting construction pending appeals should apply in this instance, which involved a supplement to the initial authorizing order.

The project would be Venture Global's third US LNG export terminal, and the developer has said it believes it will be able to reach first LNG on CP2 at least as fast as its two first projects -- the nameplate 10 million mt/year Calcasieu Pass and the nameplate 20 million/mt Plaquemines export facilities, both also in Louisiana.

CP2 would also have a nameplate capacity of 20 million mt/year across both phases and a peak production capacity of about 28 million mt/year. An FID on the project would mark the second taken on a US LNG export facility this year, after Australia's Woodside commercially sanctioned the 16.5 million mt/year Louisiana LNG project in late April.

Venture Global on May 13 reported recent commercial progress supporting the CP2 project, saying it has binding long-term contracts that cover 9.75 million mt/year from the facility. That total reflected one of the customers, US-based New Fortress, expanding its 20-year sale and purchase agreement from 1 million mt/year to 1.5 million mt/year in April.

Additional counterparties include Japan's JERA and Inpex, Germany's SEFE and EnBW, ExxonMobil, Chevron and China Gas Holdings.

Like Calcasieu Pass and Plaquemines, the CP2 project would use modular trains to cut costs and begin production much earlier than originally expected. The trains are built in Italy, shipped to the terminal sites and installed.

Venture Global said May 13 it expected the first CP2 liquefaction unit to be delivered in mid-2025, that 12 trains are already being manufactured and that all 36 have been purchased. The company also said it had limited exposure to tariffs for the first phase of CP2 at about $210 million-$350 million. That represents about 1% of the full project cost, estimated at up to $28 billion.

FERC findings

FERC pursued a supplemental environmental impact statement for the highly contested export project after appeals court rulings questioned FERC's approach to analyzing cumulative air emissions impacts involving other Gulf Coast LNG facilities (CP22-21).

In its May 23 order, the commission agreed with the favorable finding in FERC's staff's final supplemental environmental impact statement.

The final review had rejected a host of Sierra Club objections related to the impacts of emissions and small particulate matter (PM2.5) associated with the project and other industrial sources.

"We agree, that the emission impacts, including 1-hour [nitrogen dioxide] and annual and 24-hour PM2.5 impacts from the Moss Lake Compressor Station and CP2 LNG Project, when combined with past, present, and reasonably foreseeable emissions within the regional air environment, are not significant," the order said.

FERC noted that it relied on the Environmental Protection Agency and Louisiana regulator's guidance.

FERC also backed Venture Global's selection of an air monitor location that had become a matter of debate.

CP2 in March also received a conditional approval for a key LNG export license from the US Department of Energy, which had been subject to the Biden administration's permitting moratorium. The project still requires a final approval from DOE, but the agency this week said it would start issuing final orders authorizing LNG exports after concluding that a study launched alongside the permitting freeze showed exports of the super-chilled fuel are in the public interest.