Project spotlight: Plaquemines LNG [Gas In Transition]
US company Venture Global LNG formally announced in May a final investment decision (FID) on its major Plaquemines LNG project, firing the starting gun on what looks set to be a new round of LNG plant construction in the US at the least.
It is the first US LNG project to receive financial sanction since financial close on the company’s Calcasieu Pass facility in August 2019, although Sempra closed on its Costa Azul LNG project a year later in 2020. Located in Mexico, the LNG plant will source its feedstock from the US and can largely be considered an extraterritorial extension of the US gas system.
Venture has every reason to be celebrating. From a dearth of impetus, projects long in gestation have found a final push of confidence, and finance, owing to their would-be competitor Russia.
Russia’s invasion of Ukraine has prompted a backlash in Europe which now belatedly recognizes the strategic vulnerability of its dependence on Russian pipeline gas. EU buyers are turning instead to alternative pipeline suppliers and the LNG market. Meanwhile, Russia’s own LNG ambitions have stalled, owing to a dependence of their own; sanctions have hit the supply of Western equipment and technology needed to complete LNG plants under construction and planned in Russia.
Shovels in the ground
At $13.2bn, Venture Global has secured the largest project financing package to date this year. It has also managed to upsize the first phase of the project, which includes construction of the associated Gator Express pipeline, from 10mn mt/yr capacity to 13.3mn mt/yr.
The project is fully permitted and financial sanction was no real surprise as key contractors, such as Baker Hughes, had already received notices to proceed with the delivery of the project’s modular machinery units and central LNG train system in March.
Such confidence was fully justified as the developer successfully nailed down the final off-take agreements needed to support the project. On May 10, an offtake agreement with US major ExxonMobil was announced for 1mn mt/yr, a deal accompanied by 1mn mt/yr offtake from Venture’s Calcasieu Pass 2 LNG project (CP2), which is expected to start construction in 2023. The next day saw Malaysia’s Petronas book 1mn mt/yr from Plaquemines, bringing total 20-year sales and purchase agreements up to 80% of the project’s final 20mn mt/yr capacity.
Phase one customers include Poland’s PGNiG, China’s Sinopec and CNOOC, alongside European companies Shell and EDF. US LNG company New Fortress Energy is also a customer for phase two, having struck an offtake agreement for 1 mn mt/yr in March.
In April, Venture put another key piece of the jigsaw in place when it signed a purchase agreement to receive feedstock gas from NextEra.
Gulf Coast location
Plaquemines Parish, Louisiana, where the plant will be located, is about 32 km south of New Orleans on the US Gulf Coast. The 630-acre site is located on the Mississippi River with 2 km of river frontage, providing deep water access for LNG tankers without dredging.
The project is in a sense mid-scale LNG writ large. Rather than opt for Qatari-style giant LNG trains, Plaquemines will consist of up to 36, electrically-driven 0.626mn mt/yr capacity modules configured in 18 blocks. Each block will have two trains each equipped with a cold box, a heavy hydrocarbon removal section and compressor.
The train modules are manufactured in a factory setting and then delivered complete to the site, reducing both manufacturing and construction costs. The first such factory built trains were delivered to Calcasieu Pass in November 2020, less than 15 months after an FID was taken on the project. Each train, manufactured by Baker Hughes in Italy, was unloaded, transported to the site and positioned on their foundations in less than a day.
The Plaquemines plant will have six pre-treatment trains and three loading berths for LNG tankers of up to 185,000 m3. Feedstock gas will flow through acid gas removal and dehydration systems before entering the liquefiers.
Storage will be provided by up to four 200,000 m3 containment tanks, providing a robust modular system designed to minimise downtime and provide early revenue as the first units come onstream. A utility dock on the Mississippi will handle equipment and materials deliveries both during construction and operation. Power will be supplied by two 720 MW Combined Cycle Gas Turbines, plus two 25 MW gas-fired aeroderivative turbines. The latter will be used for load following, start-up and peaking needs.
The project also entails construction of the Gator Express gas pipeline to access existing interstate gas pipelines. This will consist of two 42-inch diameter pipes. One, the Southwest Lateral TETLP, will be 19 km long and connect with Texas Eastern Transmission. The second, the Southwest Lateral TGP, will follow the same route for 19 km then a further 5 km to new interconnections offshore southwest of the plant site with Tennessee Gas Pipeline Company and Texas Eastern Transmission. Each lateral will have a capacity of 1.9bn ft3/d. Together the pipelines will provide access to multiple low cost natural gas basins.
Venture picked GE Oil & Gas to deliver a comprehensive power, pre-treatment and liquefaction system. Engineering, procurement and construction for phase one is being undertaken by KZJV, a joint venture between KBR and Zachry Group, which was announced in April last year. Chart Industries was awarded the contract for the production of cold boxes and brazed aluminium heat exchangers. CB&I, part of McDermotts, was awarded the contract for two full containment concrete LNG storage tanks with associated foundations, tank top mechanical systems and pipe racks extending to the main facility.
In May last year, Venture announced that it would employ carbon capture and storage (CCS) at both its Calcasieu Pass and Plaquemines LNG facilities to reduce the carbon footprint of its operation and provide lower carbon LNG to its customers. The company estimates it will be able to capture, compress and store about 500,000 mt/yr of carbon in underground saline aquifers. A similar project is planned for the CP2 project. Successful deployment at either Calcasieu or Plaquemines would mark the first CCS facility at an LNG plant in the US.