In an attempt to reduce construction costs, Venture Global’s Calcasieu Pass LNG project has caused increased pollution emissions, resulting in air permit violations and heightened public health risks, according to a new report from US-based Institute for Energy Economics and Financial Analysis (IEEFA).
Calcasieu Pass facility is located in Cameron Parish, Louisiana, south of the city of Lake Charles. Venture Global says the project site is at an ideal location on the Calcasieu Ship Channel at the mouth of the Gulf of Mexico featuring deep-water access, proximity to plentiful gas supplies and ease of transport for buyers. Once complete, the plant will export 10 million tonnes/year of LNG.
In addition to the increased emissions, problems with the project have resulted in a lost opportunity for contract-rate profits—a factor that potential long-term clients should consider regarding projects that plan a similar construction approach, says IEEFA, which examines issues related to energy markets, trends and policies.
The report explains how the Calcasieu Pass LNG project and subsequent Venture Global projects that follow the same construction design pose issues for community residents and corporate customers.
Venture Global’s Calcasieu Pass LNG project used a modular design consisting of multiple small liquefaction trains. The design was billed as a cheap and efficient means of building export terminals. Although construction was completed quickly, the project has suffered from an extended and troubled commissioning process resulting from significant design flaws and problems related to its modular design and rapid construction. Flaring and emissions violations during commissioning have stoked community opposition to the project. Venture Global’s customers also have complained that the company is exploiting loopholes to sell LNG on a spot market at higher prices, rather than supplying it under long-term, at cheaper contract prices.
“The Calcasieu Pass LNG project is seeking to raise limits on its hazardous and toxic emissions which would negatively impact local communities,” said Trey Cowan, IEEFA energy analyst and author of the report. “Future projects could also be impacted by raising emissions limits, leaving the community at risk far into the future.”
Long-term clients for the Calcasieu Pass LNG project like BP, Shell, Repsol and Edison SPA are disadvantaged during the extended commissioning of the facility, since they’re being charged more for LNG sold on the spot market while the project is commissioned than they would under long-term contracts that take effect after commissioning. This should serve as a red flag to potential clients for other LNG projects where similar complications may arise.
The communities most affected by the Global Venture projects rely on regulators to step in to prevent environmental risks and protect the public’s interests, but are absorbing the brunt of the environmental issues that Venture Global LNG has created.