U.S. liquefied natural gas (LNG) company Venture Global LNG said on Monday that it will go forward with the second phase of its Plaquemines LNG export plant in Louisiana after securing $7.8 billion of financing.
Phase two's final investment decision (FID) comes after the first phase was sanctioned in May.
Venture Global said that completes about $21 billion in total for Plaquemines, the largest project financing ever done in the space, to build the terminal that would produce about 20 million tonnes per annum (MTPA) of LNG.
“Venture Global is proud to announce a positive FID for phase two of Plaquemines LNG, less than 10 months after sanctioning phase one,” Venture Global Chief Executive Mike Sabel said in a press release.
Demand for U.S. LNG increased after several countries around the world slowed purchases of Russian energy and imposed sanctions on Moscow after its invasion of Ukraine in February 2022.
The combination of those sanctions and the shutdown of Freeport LNG's export plant in Texas helped drive gas prices to record highs in Europe and Asia during the summer 2022.
Analysts have said the first phase at Plaquemines could start producing LNG in 2024, and the second in 2025.
Venture Global said it issued full notice to KZJV to continue construction of phase 2, making it the first U.S. project to take FID in 2023.
KZJV is a joint venture between Zachry Group and KBR Inc.
Venture Global said Plaquemines LNG phase two customers include units of Exxon Mobil, Chevron, EnBW Energie Baden Wuerttemberg, New Fortress Energy, PETRONAS, China Gas Holdings 0384.HK and Excelerate Energy.
Venture Global has about 70 MTPA of LNG export capacity in operation, construction or development in Louisiana, including the 10-MTPA Calcasieu Pass (operation), 20-MTPA Plaquemines (construction), 20-MTPA Delta (development) and 20-MTPA CP2 (development).
(Reuters - Reporting by Scott DiSavino; Editing by Chizu Nomiyama and Marguerita Choy)