Michael Sabel: CP2 LNG final investment decision scheduled for ‘middle of this year’
The US LNG exporter has already spent $5 billion with equipment suppliers and contractors for CP2, Sabel said. In addition, the company has struck a $3 billion borrowing agreement with 20 banks to help fund CP2 capital expenditures ahead of an FID.
CP2 also increased its 20-year sales and purchase agreement (SPA) with New Fortress Energy from 1 million tonnes per annum (tpa) to 1.5 million tpa, bringing the facility’s contracted offtake total to 9.75 million tpa, Sabel said.
One of the few remaining hurdles for CP2 is a greenlight from the Federal Energy Regulatory Commission (FERC). The commission initially approved CP2 last year, but on his way out of the White House, President Joe Biden’s administration made FERC draft a supplemental environmental impact statement (EIS) for the facility.
FERC issued a final supplemental EIS on 9 May. The commission still needs to re-grant its full approval.
“Subject to obtaining FERC approval, we anticipate mobilization to site and beginning site works and dredging by the middle of this year,” Sabel told analysts on Venture Global’s first quarter earnings call.
The Department of Energy (DoE) granted its blessing for CP2 in March.
Other facilities
Meanwhile, commissioning is still ongoing at Plaquemines LNG, which reached first LNG in December and is slated for a total of 36 mid-scale liquefaction trains.
Twenty-two trains are producing at Plaquemines LNG, and two more should kick off by the end of May, Sabel said. All 36 trains are scheduled to come online by the end of the year.
Once fully operational, Calcasieu Pass, CP2 and Plaquemines will have a combined 67 million tpa at peak production.
Venture Global still has plans for two more facilities: Calcasieu Pass 3 (CP3) and Delta LNG. However, Sabel said brownfield expansions at Calcasieu Pass and Plaquemines “will shift in front of CP3 and Delta”.
Sabel was a bit coy when asked by analysts about potential future engineering, procurement and construction (EPC) contracts for Venture Global facilities, including CP2. He noted Worley is the EPC contractor for CP2 and said Venture Global expects to “layer on additional EPC contracts here in the coming months”.
“But we’re working closely now with EPCs and very large subcontractors performing massive scale work.”
In its earnings report Tuesday, Venture Global revised its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2025 downward by $500 million to a range of $6.4 billion to $6.8 billion. The company had previously projected a high-water mark of $7.4 billion.
However, Venture Global is still anticipating about the same number of shipments from both of its facilities. The two terminals would deliver a combined 389 cargos for the year if they both hit the top of their projections.
Tariff impact
Venture Global is anticipating tariffs to have a roughly 1% impact on its total budget for CP2, assuming no new exemptions are put in place, Sabel said.
Tariffs could increase the cost of raw materials for construction or hinder demand for US LNG, Sabel noted. However, he said Calcasieu Pass and Plaquemines should not be materially impacted as the former is already in commercial operations and the latter has all of its major equipment on site.
Meanwhile, Venture Global has already stockpiled a “significant amount” of materials needed for CP2, including some fully fabricated modules, Sabel said.
Commented Sabel: “Shifting to tariffs imposed by foreign nations, while we cannot estimate the ultimate impact of these levies given the rapidly evolving geopolitical situation, we remain in close contact with our customers and stakeholders as the tariff conversation evolves.”
Despite concerns about demand for US LNG amid the tariff war, Sabel said Venture Global is “really pleased” with the market’s appetite for its shipments, particularly as Plaquemines produces more than the company previously anticipated.
The company continues to be aggressive in striking long-term deals and believes it will be able to announce “multiple 20-year contracts in the coming quarters”, Sabel said.
Negotiations are “tilted a little bit towards European buyers”, but discussions with Asian buyers are still “very active”, he said.
“Our appetite to signing more long-term contracts is greater than it was until recently. So we are intending to do more 20-year contracts than we had been planning, which we’re excited about,” Sabel said.
“Appetite is very strong in the market right now. I would say it’s better than it has been for the last several years. And our ability to win contracts with our cost and price advantage in the market is very strong. So we are expecting to increase our 20-year contract portfolio with existing [customers] but also with new customers as well.”
