By Marcy de Luna and Rithika Krishna
HOUSTON -Venture Global LNG said on Tuesday it would supply two million tonnes of liquefied natural gas (LNG) a year to Exxon Mobil Corp, a sign of its rapid rise in the ranks of LNG suppliers and the strong global demand for U.S. LNG.
Venture Global LNG, which plans to build four LNG plants using a modular design that streamlines construction and cuts production costs, has emerged as a powerful force in LNG. The company this year started exports from its first Calcasieu Pass, Louisiana, plant and the Exxon deal will help advance two other proposed facilities.
The United States this year is expected to surpass Australia and Qatar as the world’s largest LNG exporter, delivering more than 12.2 billion cubic feet per day. Global demand for U.S. LNG has surged since February with Russia’s invasion of Ukraine, which tightened an already under-supplied market.
Exxon’s Asia Pacific unit agreed to purchase one million tonnes of LNG each year from Venture Global’s Plaquemines LNG facility, which is now under construction, and its planned Calcasieu Pass 2 facility.
Exxon and Venture Global spokespeople did not reply to requests for comment on the value of the agreement or when shipments would begin.
“It’s a statement that Exxon believes there’s more demand, and they’re prepared to spend money and take some risks to acquire more volume,” said Jason Feer, global head of business intelligence at Poten & Partners, an energy and shipping consultancy.
The deal will help advance Exxon’s LNG sales growth in Asia and in China, already the world’s largest importer of LNG. Exxon is a 30% partner in the Golden Pass LNG facility now under construction near Sabine Pass, Texas. That $10 billion facility is expected to start processing fuel in 2024.
“We look forward to working with Venture Global as we continue to grow ExxonMobil’s LNG portfolio and progress our plans to reliably deliver natural gas from the U.S. Gulf Coast to global markets,” said Peter Clarke, Exxon’s senior vice president of LNG.
Venture Global, founded by a former energy lawyer and investment banker, has rocketed to the top ranks of LNG developers with its ability to obtain financing and rapidly build plants as rivals struggled. Its Calcasieu Pass plant was producing LNG 29 months after receiving a financial go-ahead.
(Reporting by Rithika Krishna in Bengaluru, additional reporting by Marcy de Luna in Houston, writing by Gary McWilliams Editing by Aditya Soni, Mark Potter and Bernard Orr)