1st Quarter 2026
- No external equity needed for Phase 2 after Phase 1’s $3 billion equity bridge
- Margins remain at the same level as on the CP2 LNG Phase 1 financing
- Phase 1 targets commercial operations in late 2029, Phase 2 in mid-2030
US-based Venture Global closed $8.6 billion in new debt financing on March 13 to build the 5.6-MMt/y Phase 2 expansion of its CP2 LNG export project in Louisiana. It also announced it had reached a final investment decision (FID) on CP2 LNG Phase 2, becoming the first developer to green-light a liquefaction project this year.
The project was already on a path to FID before the Iran conflict started on Feb. 28. It secured the financing by amending and upsizing the existing loans and credit facilities. This included increasing the $11.25 billion Phase 1 construction loan by $7.85 billion and the $850 million working capital and letter of credit facility by another $750 million. The combined financing for Phase 1 and Phase 2 now totals $20.7 billion.
On top of this, the Phase 1 financing, which was announced on July 28 last year, included a $2.80 billion equity bridge loan and $191 million interest reserve credit facility for a total equity financing of $3 billion for CP2 LNG Holdings, which is an indirect Venture Global subsidiary. This is why the original total Phase 1 financing was stated as $15.1 billion when it closed last year. However, for Phase 2 Venture Global did not need to finance equity.
The margins for Phase 2 remain the same as Phase 1 at 2.25-2.75% (or 225-275 basis points) over the Secured Overnight Financing Rate (SOFR). The loans must be repaid in full no later than July 28, 2032. The Phase 1 equity financing carried margins of 3.5% over SOFR and must be repaid by July 28, 2028.
The 28 banks that provided the CP2 LNG Phase 2 loans were from the US, Canada, Europe, Japan and China (see Table). Given the original loans were upsized, most of them provided the CP2 LNG Phase 1 loans, although there could be further syndication to a wider group of banks (see LNG Finance, 3Q 2025).
The size of the loan proposed by each bank would need to be scaled back because the Phase 2 financing was oversubscribed with commitments of $19 billion, and Phase 1 was oversubscribed with commitments of $34 billion.
With this latest deal, Venture Global said it has executed $95 billion in capital markets transactions across five FIDs in less than seven years. It said that the combined Phase 1 and Phase 2 financings of $20.7 billion are “the largest standalone project financing in the US bank market”.
Venture Global has signed five sales and purchase agreements (SPAs) for a combined 5 MMt/y of offtake since the company reached FID for the 14.4-MMt/y Phase 1 of the CP2 LNG export project in July 2025. Liquefaction fees for the SPAs are said to range from $2.25-$2.35/MMBtu. However, only the 1-MMt/y SPA with Spain’s Naturgy is listed with the US Department of Energy (DOE) as being directly and solely sourced from CP2 LNG. The remaining deals with Atlantic-SEE LNG Trade in Greece, Tokyo Gas and Mitsui will come from CP2 LNG and the company’s portfolio volumes.
With production targeted for 2H 2027, construction for Phase 1 of CP2 LNG is proceeding at a rapid pace. The company has at least six liquefaction trains on site and raised the roof for Storage Tank 1. The plant’s first pretreatment module is expected to arrive in April. The company plans to reach commercial operations on Phase 1 in late 2029 and Phase 2 by mid-2030.
Banks provided loans for CP2 LNG because it signed long-term SPAs. They must provide adequate debt service coverage ratios to assure bank loans can be paid back across the seven-year tenor; the loans are due July 28, 2032. Although the bank loans will typically be refinanced via bond offerings when construction advances or is complete, bond investors also require long-term SPAs to reduce risk.
The SPAs are based on the plant’s nameplate capacity of 20 MMt/y, which will require roughly 2.7 Bcf/d of feedgas to export 256 standard-sized cargoes per year. However, the plant has a peak capacity of 28 MMt/y, which will require around 3.7 Bcf/d of feedgas to export 358 standard-sized cargoes per year. Using engineering to optimize control systems and maintenance schedules without any new construction, Venture Global is seeking permission from the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE) to increase the plant’s peak capacity to 35 MMt/y, which will require roughly 4.7 Bcf/d of feedgas to export 447 standard-sized cargoes.
Venture Global also plans to build a bolt-on project to CP2 LNG that would add eight modular trains with a combined capacity of 6.4 MMt/y, requiring nearly 0.9 Bcf/d of feedgas to make an additional 82 standard-sized cargoes per year.
The CP2 LNG Phase 2 FID follows eight LNG export FIDs last year from the US, Argentina (Southern Energy) and Mozambique (Coral Norte FLNG) with a combined 69.2 MMt/y of liquefaction capacity, representing a record capital expenditure (see Poten’s LNG Finance, Dec ’25). Out of those FIDs, six projects were from the US. Prior to that, the maximum number of US projects to reach FID in a single year was three in 2023, 2019, 2015 and 2014.
This excerpt is taken from Poten’s LNG Finance in World Markets. Complete the form below to learn more or request a trial.