LNG producer Venture Global raises Plaquemines project cost forecast by $2 billion

Venture Global announced on Thursday that it expects its Plaquemines LNG Plant in Louisiana project costs to be about $2 billion more than its previous estimate due to inflation and various other factors.

The LNG producer now expects that the plant will cost between $23.3 and $23.8 billion. Previously, it was expected to be in a price range between $21 billion and $22 billion. The company paid $19.8 billion as of December 31.

Venture Global stated that costs for completing the project could increase due to factors like inflation and tariff.

The company said it had not taken into account recent tariffs imposed by the administration of President Donald Trump, which are expected to increase.

Cost of equipment increases

Set up of such plants

Last month, U.S. Federal regulators granted the company permission for the Plaquemines Plant to increase its export capacity to 27.2 million tons per year from 24 mtpa.

The company reported a profit of $871m in the fourth quarter, up from a loss $50m a year earlier. This was due to lower expenses, which offset a 6.6% drop in revenue, to $1.52bn.

In premarket trading, shares of Venture Global, a company that became the most valuable U.S. gas company when it was listed in January, rose 1.9% to $14.50.

Venture Global said it would also begin the final investment decision process for a second LNG facility with a capacity of 20 mtpa, at its Calcasieu Pass site in Louisiana. As of December 31, it had already invested $4 billion in the project.

Calcasieu Pass is already home to a LNG export facility that will export 10 mtpa at minimum once completed.

Venture Global has been in contract disputes for months with customers like BP, Shell, and Edison due to the lengthy testing and optimization process. (Reporting and editing by Leroy Leo in Bengaluru, Tanay Dhumal from Bengaluru)

(source: Reuters)