FERC pushes back review timeline for Venture Global's CP2 LNG project

Federal Energy Regulatory Commission staff suspended an environmental review timeline for Venture Global LNG's proposed CP2 LNG project in Louisiana and an associated pipeline, saying the developer has not yet provided all the requested information about the facility.

FERC said July 6 it could not complete a draft environmental impact statement scheduled to be released this month because the regulator still needs information such as analyses of hazards, cumulative impacts and noise associated with the facility capable of producing up to about 28 million metric tons of LNG per year (CP22-21, CP22-22).

FERC said it would continue to process the application "to the extent possible" and would release a revised environmental review schedule once the developer answers FERC's information requests. The regulator said in the notice that "this is not a suspension of the commission staff's review," even though suspended schedules can mean permitting delays.

Venture Global said it expects to address the commission's remaining requests over the coming weeks.

"Venture Global is working hard to complete outstanding regulatory deliverables for CP2, a project that will supply US LNG to the world at a historic time in global energy markets," a Venture Global spokesperson said. "We appreciate that FERC continues to process CP2 and remain committed to satisfying the commission's regulatory requirements — as we have for years spanning multiple administrations."

Indefinite suspensions by FERC are not unheard of, "but it usually occurs for projects that don't appear viable," analysts at ClearView Energy Partners said in a note to clients. The delay for the CP2 project stood out because Venture Global has benefited from a flurry of commercial activity in 2022 supporting new projects, including CP2.

Venture Global has announced long-term contracts covering roughly 3.75 million mt/y of LNG supplies tied to the facility in recent months, including deals with New Fortress Energy, Exxon Mobil, Chevron, and Germany's EnBW Energie Baden-Württemberg AG.

Flagship terminal continues ramp-up

Venture Global continues to ramp up operations at its 10-million mt/y Calcasieu Pass LNG terminal in Louisiana after starting production at the facility in early 2022. The developer asked FERC on July 6 for authorization to begin commercial service on two additional liquefaction blocks, which each contain two LNG liquefaction trains. Four of nine liquefaction blocks are already in commercial service. On July 5, the developer also said that it was ready to start commissioning on its final liquefaction block meaning that all of the facility's 18 trains will likely soon be producing LNG. Over the past week, feedgas flows to the terminal have ramped up to an average 1.4 Bcf/d implying that the facility is now running at or close to full tilt.

Venture Global used modular trains at Calcasieu Pass to cut costs and begin production months earlier than originally expected. The liquefaction trains were built in Italy, shipped to the site and installed.

Venture Global has taken a similar approach with its other LNG projects.

In May, Venture Global announced a final investment decision on its second LNG terminal, the 20-million mt/y Plaquemines LNG project south of New Orleans. Venture Global is also developing a fourth LNG terminal in Louisiana, the up to 24-million mt/y Delta LNG project.

Venture Global has said it expects to begin construction on CP2 in 2023 and to start operations as soon as 2025.

FERC signals not 'dragging its feet'

ClearView analysts described FERC's notice about the environmental review schedule for CP2 as a signal that the regulator is working to advance natural gas infrastructure. FERC has faced criticism from some U.S. senators that the commission has been too slow to act on gas projects and blowback over its proposed permitting policy changes.

"We think the suspension of CP2 LNG is a datapoint that rebuts the criticism that FERC is dragging its feet on infrastructure reviews," ClearView analysts said.