Two U.S. Gas Exporters Are Closer to Easing the Energy Crisis
(Bloomberg) -- Two U.S. natural gas exporters said they’re moving closer to expanding supplies of the power-plant and heating fuel as a global shortage roils economies from the U.K. to China.
Venture Global LNG is “very close” to producing the first drops of liquefied natural gas from its Calcasieu Pass terminal in Louisiana, Chief Executive Officer Michael Sabel said Thursday. Meanwhile, Cheniere Energy Inc, the largest U.S. exporter, told investors it’s close to being able to go ahead with a multibillion-dollar investment to enlarge its facility in Corpus Christi, Texas.
Overseas gas prices are nearly four times higher than those in the U.S. as European and Asian buyers desperately seek to replenish depleted inventories ahead of the winter. That’s reviving demand for long-term supply contracts that underpin LNG projects.
“LNG market fundamentals are as constructive for long-term contracting and the construction of new liquefaction capacity as I’ve seen at any point since I joined Cheniere,” Cheniere CEO Jack Fusco said on a conference call.
Over the past five weeks, Venture Global and Cheniere have signed five deals to bring a combined 9.2 million metric tons of LNG onto the global market.
Venture Global’s Calcasieu Pass LNG plant received permission Thursday to begin the startup process for the first liquefaction unit and a related storage tank. Once in full service, the plant will become the seventh U.S. LNG export terminal, producing as much as 10 million tons a year.
“We are very close, but I’m not allowed to break news on exactly what the specific schedule is,” Sabel said in a Bloomberg TV interview. “So, I can say, just a few months away.”
Permitted to produce 20 million tons of LNG per year, the company’s proposed Plaquemines LNG export terminal is expected to be completely sold out by mid-2022, Sabel said.
“We’ll be in construction for all 20 million tons in 2022,” Sabel said.
Over the past year, Cheniere has sold seven out of the 10 million tons of LNG per year for the expansion of its Corpus Christi LNG plant. The company expects to reach a final investment decision next year.
Last month, Cheniere introduced feed gas into the sixth and latest liquefaction train at its Sabine Pass facility, Fusco said. The project is expected to reach substantial completion in the first quarter of next year, he added.
“With our origination team as busy as they are, I’m confident we’ll get that required commercial support in the coming quarters,” said.
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