Venture Global LNG starts commercial operations at Calcasieu Pass (U.S.) plant
Venture Global LNG has begun commercial operations at its Calcasieu Pass plant in Louisiana, more than 3 yr after it first produced liquefied natural gas (LNG), the company said on Tuesday.
The move to commercial operations means the Arlington, Texas (U.S.)-headquartered company has brought an end to the extended commission of the plant which resulted in its customers taking legal action to try to force it to provide them with their contracted cargoes.
Commissioning, or making sure a new plant's systems are functioning as designed, takes months at many LNG facilities. It took 3 yr at Calcasieu Pass, allowing Venture Global LNG to sell large test cargoes to high bidders on the red-hot global market instead of to customers whose contracts called for them to pay less.
Shell, bp, Orlen, Edison and Repsol filed arbitration claims saying Venture Global LNG deliberately failed to fulfill their supply contracts, dragging its feet to commission the plant so it could profit from higher spot prices. Venture Global argued that a faulty power system delayed normal operations.
The project was able to overcome significant unforeseen challenges, including a global pandemic, two hurricanes and a force majeure event triggered by issues with the facility’s power island, the company said on Tuesday.
"Having completed a multi-year rectification and remediation of key components of the facility that underpin the redundancy features inherent in the project’s design, Calcasieu Pass is now ready to operate safely and reliably," Venture Global said in a statement.
Shell and bp did not immediately respond to a request for comment.
The move to commercial operations is unlikely to stop ongoing arbitration cases brought by the long-term customers against Venture Global as Shell, Orlen and Repsol have all said they will continue their legal battle with Venture Global even after they start receiving cargoes.
Venture Global is also likely to keep profiting from strong global spot market prices, as its newer and larger Plaquemines facility ramps up production.
Just a startup 5 yr ago, Venture Global is now the second-largest LNG producer in the United States and helped the country emerge as the world's largest LNG exporter.
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