Exxon and QatarEnergy's joint venture Golden Pass produces first LNG at new Texas facility

By Curtis Williams and Sheila Dang

HOUSTON, March 30 (Reuters) - Golden Pass LNG, a joint venture between QatarEnergy QATPE.UL and Exxon Mobil XOM.N, has produced its first liquefied natural gas at its new facility in Texas, the company said on Monday, a major step toward bringing one of the largest U.S. export projects online.

The plant is expected to export its first cargo in the second quarter, Exxon said on Monday.

Global gas supplies have been squeezed as the war in the Middle East disrupted output in Qatar, one of the world’s biggest LNG suppliers.

“Today, we began producing LNG at our terminal in Sabine Pass, marking the completion of a significant effort to construct, commission, and start up the first LNG train,” Alex Savva, president and CEO of Golden Pass, said in a statement.

Once fully operational, Golden Pass will be able to produce 18 million metric tons per annum.

"Golden Pass LNG will strengthen U.S. energy production and reinforce the nation’s role as a reliable supplier to global markets, enhancing energy security and helping meet worldwide demand," Exxon said.

QatarEnergy holds a 70% stake in the project and Exxon owns 30%. Train 1, the initial production unit, will add 6 mtpa of new LNG capacity. Based on equity ownership, QatarEnergy will receive just over 4 mtpa while Exxon will receive just under 2 mtpa, the company said.

This milestone reflects an unwavering commitment to safety and continued progress toward full operations, Exxon said.

QATARENERGY'S FORCE MAJEURE

QatarEnergy, the world’s second‑largest LNG exporter, said on March 24 it will have to declare force majeure on its production, citing the conflict in the Middle East. It said it has shut in facilities accounting for roughly 20% of global LNG supply.

Damage to those plants could leave the company without about 17% of its current output for up to five years, it said.

The $10 billion Golden Pass project has faced delays and cost overruns since construction began in 2019, including the bankruptcy of its original lead contractor. Golden Pass said first LNG production sets the stage for the terminal to deliver its first cargo from Sabine Pass, Texas.

The plant will be able to sustain liquefaction operations and meet its commercial and strategic targets, the company added. Supply disruptions from Qatar have driven Asian LNG prices sharply higher and prompted some countries to turn to coal or restrict energy exports as they contend with the shortages.