Calcasieu Pass received Federal Energy Regulatory Commission (FERC) authorization on October 26 to place the final three liquefaction blocks (7-9) into service. Blocks 1-6 have been online since last year, and blocks 7-9 have been commissioning since then as well. The terminal has been operating at its expected full-utilization level since last fall, which has been a source of conflict with its anchor customers. All the LNG exported from Calcasieu Pass so far has been categorized as commissioning cargoes, meaning that Venture Global can and has marketed the LNG itself. No LNG cargoes have been sold under its long-term contracts.
In its petition to FERC, Venture Global requested authorization to modify its commissioning plan and allow these final three blocks to be placed into service while repairs and work continue on other equipment originally supposed to be placed into service with blocks 7-9. FERC has granted the request and said in its response that the terminal had demonstrated that it could operate above its authorized nameplate capacity and near its authorized maximum capacity even with just the heat recovery steam generator and other equipment. The terminal has not yet begun commercial operations because of these ongoing issues.
Calcasieu Pass’ customers Shell, Edison, Repsol and BP have all filed arbitration cases against Venture Global because of the lengthy commissioning process and lack of contracted cargoes. Venture Global maintains that it has not violated any of its offtake agreements. When it filed for FERC authorization on blocks 7-9, it said that this was not a request to begin commercial operations nor did it mean that offtakers would have access to cargoes as there was still more commissioning and repair work to be completed. Shell said in an email that Venture Global should immediately begin deliveries to its customers. However, that does not seem to be Venture Global’s current plan. Full commercial operations are not expected at the terminal until late 2024 when repair work will be complete. Meanwhile, the terminal has been operating as if it were fully online for over a year now and the arbitration cases with four of its anchor customers are ongoing.
