Total CEO: Company rejected Venture Global LNG as supplier due to lack of trust
TotalEnergies has rejected the opportunity to be a long-term client of Venture Global LNG U.S. Terminals, because it does not trust them, said CEO Patrick Pouyanne on Wednesday.
Venture Global, the U.S.'s most valuable LNG company, has seen its stock price soar after a massive initial public offering (IPO) last month. However it has faced legal challenges by clients such as BP and Shell who have accused them of taking too long to honour supply contracts when commissioning their projects.
"I'm not going to do business with these people because of their actions." ... "I don't want my friendships with Shell and BP to be a source of conflict," Pouyanne said.
Venture Global, he said, had initially approached Total to ask if they would be interested in signing a contract for the long-term supply of liquefied gas from its Calcasieu Pass Terminal in Louisiana.
Pouyanne claimed that he rejected the offer because he lacked trust.
He said, "The price of LNG was so cheap." I asked my colleague how it was possible to pay $1 cheaper than the rest. What's the trick?
Total, he said, later declined to accept cargoes at Venture Global's second, more recent terminal in Louisiana, which is still being built, due to the controversy surrounding the slow commissioning of Calcasieu Pass.
Total, he said, is willing to purchase Venture Global's spot-cargoes, if the prices are low enough.
Venture Global was shocked by Pouyanne’s remarks.
"We are shocked to hear that Total has done this. We have a great deal of respect for them. Venture Global continues to honor its contracts and build our facilities at record speed.
Venture Global expects that the Calcasieu Pass Project will move from the commissioning phase to the commercial operation phase by the first quarter of 2020.
This plant has been shipping and producing LNG for nearly three years. It has sold cargoes on the spot market, which is a lucrative market, instead of supplying customers such as BP, Shell Repsol, Orlen, and Edison, claiming that the plant was not fully operational.
According to SEC filings, the project earned up to 8,6 billion dollars in operating profit by December 2024.
Plaquemines, the company's Plaquemines facility is still under construction but it has already started to process large amounts of gas. According to data provided by financial firm LSEG, the company was on target to pull 1.3 billion cubic foot of gas Wednesday.
Venture Global is the second largest LNG producer in the world behind Cheniere. The U.S. is expected to maintain its No. 1 position in 2025 with the help of Plaquemines. In 2025, the U.S. is expected to maintain its No. 1 ranking. Reporting by America Hernandez and Curtis Williams, Houston, with editing by Leslie Adler.
(source: Reuters)
