Venture Global (VG) made a final investment decision (FID) for $15.1B on CP2 LNG Phase 1 and the associated CP Express Pipeline, which began construction early in July. The decision is the latest sign of momentum driving new gas demand for exports.
VG did not specify the size of Phase 1, but did note that the facility will have a peak production capacity of 28 Mtpa (~4 Bcf/d) once fully built. In the Macro Supply & Demand Forecast, East Daley Analytics models nameplate capacity of 20 Mtpa (~2.85 Bcf/d), and we have moved our in-service data forward to 3Q27 after this FID. By our count, CP2 currently has 1.5 Bcf/d of offtake volumes lined up under binding sales and purchase agreements (SPAs).
Despite the lack of clarity around project size, we can make some assumptions based on VG’s Plaquemines LNG, which shares the same 36 mini-train design. Plaquemines LNG FID’d in two phases of $13.2B and $7.8B, for a total of $21B. The jump from $13B to $15B is likely due to inflationary cost pressures rather than any differences in the project scope or construction schedules.
We also assume CP2 will follow Plaquemines LNG’s rapid ramp schedule. Plaquemines is already pulling over 2.6 Bcf/d, just seven months after the facility starting taking significant feedgas in January, and the facility is on track to take as much as 4 Bcf/d by the end of the year, according to VG’s 1Q25 guidance.
LNG projects near Gillis in southwestern Louisiana have seen significant momentum since the Trump administration came into office. The Department of Energy has expedited approval of non-free trade agreement export licenses, allowing both CP2 and Woodside Louisiana LNG to make quick FIDs. We expect Commonwealth LNG to follow suit as well, now that the project is nearly fully contracted under binding SPAs.
On the supply side, East Daley expects sufficient pipeline capacity will be available, at least through 2030. CP2 should be able to source adequate supply via Blackfin Pipeline and CP Express, which together form a supply line from Katy and provide access to cheap Permian gas.
Other projects like Woodside LNG have plenty of optionality out of the Gillis hub, as a slate of new Haynesville egress pipes come online over the next two years. Williams’ (WMB) LEG pipeline (1.8 Bcf/d) began service in late July, and Momentum’s NG3 (1.7 Bcf/d) won’t be far behind. WhiteWater Midstream also upgraded its Pelican Pipeline from 1.75 to 2.5 Bcf/d. And even DT Midstream’s (DTM) LEAP and Energy Transfer’s Gulf Run are not yet full, with plenty of potential expansion capacity available.
For a closer look at the Gillis market, see East Daley’s Southeast Gulf Supply & Demand Report. – Oren Pilant Tickers: DTM, VG, WMB.
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