Venture Global secures $500 million loan for Plaquemines LNG construction

Houston — Venture Global LNG has secured $500 million in financing to help fund certain construction related to its second liquefaction project in Louisiana, the 20 million mt/year Plaquemines LNG terminal, the company said Feb. 11.

The work would involve pre-final investment decision activities. Venture Global is targeting full construction to begin in 2021. It has yet to declare an FID. US regulatory approvals are in hand.

JPMorgan Chase and Morgan Stanley, as arrangers, and Mizuho Bank and Bank of America, as lenders, provided the term loan that Venture Global will use to fund the construction-related activities at Plaquemines LNG, as well as for general corporate purposes. The banks are among lenders that worked with Venture Global on the Calcasieu Pass project, the developer said in a statement.

Venture Global is seeking sufficient commercial support for Plaquemines LNG, which would be built south of New Orleans. as it continues to build the 10 million mt/year Calcasieu Pass terminal in Cameron Parish in southwestern Louisiana.

The most successful of the second wave US LNG export terminal developers sanctioned Calcasieu Pass with about 90% of its total offtake sold under long-term agreements. To date, Venture Global has announced 3.5 million mt/year of supply agreements tied to Plaquemines LNG. That's 17.5% of the total proposed capacity, or 35% of what it said would be a 10 million mt/year first phase.

No offtake agreements have been announced to date for a third LNG export project in Louisiana that Venture Global first proposed in 2019, the up-to-24 million mt/year Delta LNG.

In January, Venture Global proposed a fourth liquefaction project, a terminal called CP2 that would be capable of producing up to 24 million mt/year and be built on land adjacent to Calcasieu Pass. In its pre-filing for CP2 with the Federal Energy Regulatory Commission, the company did not mention Delta LNG. A monthly pre-filing status report filed to FERC on Feb. 11 said Delta LNG continues to prepare its federal and state environmental permit applications.

As recently as mid-September 2020, Venture Global was expecting more than half of the supplies produced at Plaquemines LNG to go to Europe, based on discussions with existing and potential buyers. European utilities were key foundation customers for the first wave of US liquefaction supplies.

In November 2020, France's Engie halted talks over a potential long-term supply agreement with NextDecade tied to the developer's proposed Rio Grande LNG export facility in Texas, amid pressure from environmental groups not to import LNG produced from shale gas.

Based on current market dynamics, with Asia's insatiable appetite for LNG now beginning to cede on a seasonal basis, Europe will once again be faced with becoming the market of last resort for incremental supply starting in the second quarter of 2021, according to S&P Global Platts Analytics.