Chinese buyers increase offtake commitments to Venture Global LNG in US

Offtake commitments that China's Sinopec and its trading arm, Unipec, have made to buy LNG from Venture Global LNG have been increased to at least 7.5 million mt/year, according to statements the two companies issued Nov. 4.

When the purchases take effect, Venture Global would overtake Cheniere Energy as the biggest US supplier of LNG to Chinese counterparties on a term basis.

In letters that Venture Global sent to the US Department of Energy that were disclosed in October, the company said that Unipec had agreed to buy 1 million mt/year of LNG for three years from the Calcasieu Pass liquefaction terminal in southwest Louisiana that Venture Global is currently building. The letters also said that Sinopec had agreed to buy 4 million mt/year of supply for 20 years from Venture Global's Plaquemines LNG facility that it has proposed to build south of New Orleans.

The statements both companies issued -- their first public comments on the agreements – repeated the figures for Plaquemines LNG. For Calcasieu Pass, Sinopec said that Unipec has agreed to buy 3.8 million mt/year of LNG, or 2.8 million mt/year more than previously disclosed. Venture Global's separate statement put the Unipec-Calcasieu Pass figure at 3.5 million mt/year and said that the deal was for a shorter period than the Plaquemines LNG deal.

A Venture Global spokesperson did not respond to multiple messages seeking comment on the differing figures and on the reason for the staggered disclosures.

The transactions are part of a recent blitz of commercial activity between US exporters and Chinese buyers amid volatile Asian and European prices that remain high, though down from record levels seen in early October.

Cheniere said Oct. 11 that a subsidiary of China's ENN Natural Gas had signed a 13-year deal to buy 900,000 mt/year of LNG, starting in July 2022, from the US exporter. Cheniere previously signed two long-term contracts with PetroChina for a combined 1.2 million mt/year of LNG. Only a small portion is in effect, with shipments on the balance starting in 2023.

Venture Global's 10 million mt/year Calcasieu Pass facility is being built using modular trains that are smaller than the traditional liquefaction units used at other US facilities. The modular trains are being constructed in Italy and delivered to the site and plugged in one at a time.

Earlier in 2021, Venture Global said it plans a phased operational startup and that it could begin production and exports by the end of 2021. That would be a year earlier than originally anticipated. More recently, however, the operator has not provided an update on construction progress at Calcasieu Pass. Venture Global has previously said full operations at the export terminal were expected in mid-2022.

Venture Global also has long-term contracts to support Calcasieu Pass with Shell, Italy's Edison, Portugal's Galp, Britain's BP, Spain's Repsol and Poland's PGNiG.