LNG Production Due Diligence and Monitoring

Venture Global LNG Inc. was a new entrant to the U.S. Gulf Coast liquefied natural gas (LNG) production industry when it engaged Lummus Consultants to complete a comprehensive, technical due diligence assessment on behalf of potential lenders for its first LNG project, a 10-mtpa nameplate LNG plant located at Calcasieu Pass near Lake Charles, Louisiana.

Prior to the Calcasieu Pass project, most LNG liquefaction plants in the market were based on large-capacity trains in the range of 4 mtpa to 8 mtpa. Venture Global opted to use multiple 1.3-mtpa nameplate blocks comprising two mirror-image liquefaction trains, thus significantly reducing the size of key equipment and pipe systems. Furthermore, a modular construction strategy enabled work to proceed at multiple locations along parallel paths, creating a repeatable cookie-cutter design that could be copied at multiple sites with minimal design modifications.

The technical due diligence review addressed the technology, design, gas supply plans, contract strategy, project management and implementation strategy, performance expectations, key contracts, proposed operations, maintenance strategy and costs, and permitting. Evaluations of the schedule and construction execution plans were particularly important considerations in the due diligence review. The Calcasieu Pass project was significant because it produced first LNG within an industry-leading timeframe.

Venture Global has replicated its execution model and engaged Lummus Consultants to undertake technical and environmental due diligence for its Plaquemines LNG and CP2 LNG projects. These are both 20-mtpa nameplate liquefaction plants that utilize the same basic concept as the Calcasieu Pass project but incorporate lessons learned. The environmental scope of this work included a climate change risk assessment in accordance with the requirements of the Equator Principles (EP4). Following financial close, the lenders engaged Lummus Consultants to monitor construction, commissioning and startup of the facilities.