By Curtis Williams
HOUSTON (Reuters) – Venture Global LNG will begin commercial operations at its Calcasieu Pass plant in Louisiana on April 15, the company said on Monday, some three years after it shipped its first LNG cargo in a move that led to a protracted dispute with customers.
Long-term customers, including Shell and BP, have been notified of the start of commercial operations, the company said.
Venture Global’s failure to move to commercial operations years after it started selling the superchilled gas on the spot market led to contract arbitration cases brought by some of the world’s top oil and gas producers, including BP, Shell, Edison, Orlen and Repsol.
Shell said it welcomed the announcement but was not optimistic. Shell said it had been told for nearly three years that deliveries from the plant were forthcoming.
“We remain skeptical of their intent to fulfill their obligation to provide the cargos,” Shell said in a statement to Reuters.
BP and Edison declined to comment on the announcement.
The facility will start commercial operations in under 68 months from being given the financial go ahead and despite substantial impacts of two hurricanes, the COVID-19 pandemic and manufacturing issues, the company said.
“These efforts now allow us to supply our long-term customers with the full 20-year contract term of the lowest-cost, clean LNG as promised under our contracts,” Venture Global said in a statement.
Venture Global recently became one of the most valuable U.S. LNG companies when it became a publicly traded company in January.
It told investors at that time that its strategy is to have extended commissioning periods so that it can maximize its profits through sales on the spot market at higher prices than it can get under long-term contracts.
Venture Global’s stock was up more than 4% to $16.60 in midday trading on Tuesday.
(Reporting by Curtis Williams in Houston; Editing by Mark Porter and Chizu Nomiyama)
Comments