GLNG: US regulators support Venture Global on Calcasieu Pass plant equipment dispute

Venture Global LNG has received the backing of US regulators in its long-running dispute with foundation customers over equipment repairs at its Calcasieu Pass LNG export terminal, Reuters reported on September 27.

The Federal Energy Regulatory Commission (FERC) stated in its finding that the US LNG upstart has taken significant actions to address and fix equipment issues at its LNG export terminal in Louisiana.

“Venture Global team was approaching the diagnosis and remediation of the equipment performance in a careful, technically sound matter,” FERC stated in a status report seen by Reuters.

The company has cited the faulty equipment as justification for not yet delivering contracted cargoes to foundation customers as the facility has not yet finished its commissioning state as it repairs the damaged equipment.

It represents a key backing for Venture Global, which has been embroiled in a heated dispute for two years with a handful of European foundation customers including Shell, BP, Orlen, Galp and Edison, which have yet to receive any cargoes despite Venture Global selling more than 330 cargoes on the spot market during that time.

The dispute is being heavily watched by players in the LNG sector. In September, an assessment by consultancy Compass Lexecon commissioned by Shell estimated that Venture Global “wrongfully earned” $3.5bn by failing to supply contracted shipments to foundation customers.

Compass Lexecon’s assessment also estimated that continued sales on the spot market by Venture Global would raise additional costs to the European foundation customers to $4.65bn in order to procure replacement LNG from other suppliers. Meanwhile, Venture Global has defended itself against the accusation, calling the consultancy’s report “paid propaganda”.

Venture Global has made a huge splash in the LNG industry as an upstart disruptor. The young company is poised to become the US’s second-biggest LNG exporter by the end of the year, when its second facility Plaquemines LNG is expected to come online. Upon Plaquemines’ start-up, only Cheniere Energy will produce more LNG in the US.

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