Venture Global LNG's second liquefied natural gas export plant, currently under construction in Louisiana, is $2.35 billion over budget and costs could still rise, according to financial documents prepared for its initial public offering of shares.
The fast-growing LNG exporter blamed inflationary pressures and costs to keep construction on schedule. The ultimate cost of the Plaquemines LNG facility was projected to reach $21 billion to $22 billion, documents viewed by Reuters show.
The company had no immediate comment.
The 20 million metric tons per annum (MTPA) export facility likely will start producing superchilled gas in coming weeks. It could be one of two new U.S. LNG plants to start operations this year.
Soaring costs for labor, steel and processing equipment have U.S. LNG developers suffering budget overruns and, in some cases, running well behind initial completion schedules.
The Golden Pass LNG join venture between QatarEnergy (QATPE.UL) and Exxon Mobil (XOM.N) was more than $2 billion over budget and a year behind schedule when is lead contractor Zachry Holdings (ZHII.UL) filed for bankruptcy and exited the project earlier this year. Operations may begin late next year or early 2026.
Venture Global has covered the $2.35 billion cost overrun and feels it should have enough cash, borrowing capacity and "access to sufficient commissioning cargoes proceeds" to meet further increases, the preliminary IPO documents showed.
The company has said Plaquemines will have a similar commissioning period to its Calcasieu Pass LNG facility, with contract customers likely to receive their first cargoes in 2026 at the earliest, Venture Global LNG CEO Mike Sabel told Reuters in an interview late last year.
Founded 11 years ago by an energy lawyer and investment banker, the company has quickly become a major exporter of liquefied natural gas, competing against larger rivals Cheniere Energy (LNG.N), Freeport LNG and Sempra (SRE.N).
CONTRACT DISPUTES
Venture Global's Calcasieu Pass 10 MTPA facility is now expected to cost $9.8 billion, inclusive of the repairs to faulty heat recovery steam generator that delayed full commercial operation, the documents show.
Venture Global expects to spend another $343 million to complete the repairs, according to its consolidated balance sheet.
The company is embroiled in contract disputes over the plant startup with BP (BP.L), Shell (SHEL.L), Edison (EDNn.MI) and Orlen (PKN.WA) that could cost it hundreds of millions of dollars.
Venture Global has been commissioning Calcasieu Pass since March 2022 and has sold its commissioning cargo on the spot market earning operating profits of $8.4 billion between March 2022 and December 2023, documents show.
