Page 10 - NorthAmOil Annual Review 2021

NorthAmOil PROJECTS & COMPANIES NorthAmOil

Venture Global, CNOOC strike supply deal

US-CHINA THE US’ Venture Global LNG announced in company, Sinopec, as well as a separate 3.5mn
late December that it had struck a deal to supply tpy deal with Sinopec subsidiary Unipec cover-
LNG to a subsidiary of China National Offshore ing a shorter duration.
Oil Corp. (CNOOC). Both the Sinopec and CNOOC deals illus-
This marks the first LNG supply agreement trate the return of Chinese interest in buying
signed between CNOOC and a US exporter of US LNG after trade between the two stalled
the fuel. amid a trade war. Chinese purchases of US LNG
Under the 20-year sales and purchase agree- resumed followed the onset of the coronavirus
ment (SPA), Venture Global will supply 2mn (COVID-19) pandemic and are now rising to
tonnes per year (tpy) of LNG to CNOOC from record highs, buoyed by growing demand in the
its planned Plaquemines export terminal in Lou- short term and the country’s decarbonisation
isiana. Additionally, CNOOC will buy 1.5mn tpy push in the longer term.
of LNG from Venture Global’s Calcasieu Pass China has set a carbon neutrality target of
facility for a “shorter duration”, the US company 2060 and has already been pursuing a shift
said. from coal to natural gas for some time, with
Calcasieu Pass, which is also located in Lou- LNG imports playing a significant role in this.
isiana, is currently undergoing commissioning The deals between Venture Global and Chinese
ahead of commercial service starting early this buyers have been touted as being in line with this
year. Meanwhile, initial construction work has decarbonisation push.
started at the Plaquemines LNG site, though a “China is critical to global climate efforts,
final investment decision (FID) on that project and LNG supplied by Venture Global will serve
has yet to be announced. as an important addition to their low-carbon
CNOOC is China’s largest importer of LNG. energy mix for decades,” Venture Global’s CEO,
Venture Global also recently struck two 20-year Mike Sabel, stated in the announcement of the
SPAs, for 4mn tpy in total, with another Chinese CNOOC deal.™

NextDecade delays Rio Grande

FID until second half of 2022

TEXAS US-BASED NextDecade has pushed back a the US Federal Energy Regulatory Commission
planned final investment decision (FID) on its (FERC). While the FERC approval for the pro-
Rio Grande LNG project in Texas again, this ject has not been withdrawn, the commission
time until the second half of 2022. is required to address the gaps identified in the
The latest delay was disclosed in an investor ruling.
presentation posted to the company’s website NextDecade has since amended its appli-
on January 3. No decision was given for the cation to build Rio Grande LNG to include a
move. carbon capture and storage (CCS) facility that
An FID on the project has been delayed would be expected to capture at least 90% of
twice since 2020. Rio Grande had initially the carbon dioxide (CO2) emissions from the
been expected to start producing LNG in 2023. project.
NextDecade was among several North Ameri- Rio Grande would have a production capac-
can LNG developers to push back an FID on a ity of 27mn tonnes per year of LNG from five
planned export terminal following the onset of liquefaction trains. The FID targeted for the
the coronavirus (COVID-19) pandemic, which second half of this year would cover at least two
caused demand to fall in 2020 and led to numer- trains, with a combined capacity of 11mn tpy, the
ous LNG cargoes from the US being cancelled company said.
that summer. Now, though, LNG demand and There is only one offtake contract in place
prices are rising, and certain other US export to date for Rio Grande, with Royal Dutch Shell,
terminals are thought to be close to FID. How- covering 2mn tpy over a 20-year period. Next-
ever, it appears that Rio Grande is not currently Decade continues to seek additional buyers as
among them. it works to support the cost of constructing the
The project suffered a setback in August terminal, and said in its presentation that nego-
2021 when a federal appeals court found fault tiations were “advancing with multiple counter-
with its environmental review, carried out by parties in Europe and Asia”.™

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