Venture Global has contracted 60% of expected Calcasieu Pass output

Venture Global LNG’s planned Calcasieu Pass LNG project moved closer to realization today, as BP (ticker: BP) announced a long-term LNG purchase agreement.

Venture Global will supply 2 MTPA to BP for 20 years under the new agreement on a free on board basis. BP is the fourth company to sign on with Venture Global, as Shell (ticker: RDS), Galp (ticker: GALP) and Edison have also signed contracts to acquire gas. Shell has agreed to purchase 2 MTPA, while Galp and Edison will each purchase 1 MTPA.

With 6 MTPA contracted, Venture Global now has commitments on more than half of the output of its planned Calcasieu Pass LNG plant, which is designed to produce 10 MTPA. This level of commitment places Calcasieu Pass as one of the most established projects in the “second wave of U.S. LNG,” those projects that are planned but not yet under construction. Most other projects have yet to sign any long-term agreements, much less contract the majority of expected output.

BP Snaps Up LNG From Venture Global’s Calcasieu Pass

Source: Venture Global

Venture Global expects to receive FERC approval this year, with FID in the last months of 2018. If the project is approved, it should be completed in late 2021, with deliveries beginning in 2022.

All buyers are European so far

While BP and Shell will be familiar to anyone who follows international energy, Galp and Edison may be less familiar. Galp is a Portuguese integrated energy company, with operations through the oil and gas value chain. The company has E&P operations in several countries, but focuses on Brazil and Angola. Galp also runs two refineries in Portugal and is a major supplier of gas and electricity in the country.

Edison is a similar company based in Italy. The firm has production in numerous locations throughout the world, and is a major supplier of energy to Italy itself. The firm currently accounts for about 20% of Italy’s gas imports; the agreement with Venture Global will increase its imported gas by about 10%.

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