Challenges Mount for U.S. LNG Exporter Venture Global Amid Market Turmoil
Despite ambitious expansion plans and government support, Venture Global faces stock market setbacks and legal disputes.
Senior officials from the Trump administration recently attended a celebration for the expansion of Venture Global's liquefied natural gas (LNG) export facility in a project valued at $18 billion.
This event has been interpreted as a strong signal of a revived American prominence in the global energy arena.
During the ceremony held at the Hackberry facility on the Gulf Coast of Louisiana, Energy Secretary Chris Wright praised CEO Mike Sabel as a 'great visionary founder.' However, this celebration was contrasted by a significant sell-off of Venture Global’s shares, which plummeted 36% by the end of trading, following disappointing sales figures, export volumes, and profits that fell short of expectations.
Additionally, the company faced a surprising $1.3 billion increase in facility construction costs, all amid favorable conditions in the energy market.
This downturn marks a stark reversal for Venture Global, which had been preparing for an initial public offering (IPO) just two months prior that would have elevated its valuation above that of oil giant BP. The IPO's underwhelming results, litigation with key clients, and disappointing early financial results have led to substantial losses for investors and prompted serious doubts regarding the company's ability to execute its promised plans.
The company's market capitalization has dropped to just $23 billion, less than one-third of the $60 billion valuation achieved in a diminished IPO conducted on January 23. This figure is significantly lower than the initial target of $110 billion set by the company.
Shares have also fallen below their IPO price on the first day of trading and have yet to recover.
Joseph Schuster, founder of IPOs Schuster, characterized the company’s performance as 'the worst ever' relative to its size within the energy sector.
He indicated that the weak demand for the IPO raised 'warning signals,' suggesting that ongoing declines in stock price could fuel short-selling and hinder the firm's ability to raise additional funding through secondary offerings.
Venture Global, a major U.S. LNG supplier, is currently facing a class-action lawsuit alleging misleading information in its IPO registration statement.
The company has denied these allegations, asserting they lack legal basis.
In addition to this, it is embroiled in a $5 billion arbitration dispute with several clients, including Shell, BP, and Repsol, who accuse it of failing to deliver gas shipments as contracted and instead selling them on the spot market at higher prices following the onset of the war between Russia and Ukraine.
Venture Global has contended that its facilities were not yet operational at full capacity, justifying the sale of shipments on the spot market without breaching contracts, emphasizing its commitment to fulfilling contractual obligations.
Despite these significant challenges, co-founders Mike Sabel, a former investment banker, and Robert Pender, an attorney, continue to pursue ambitious growth plans for the company.
Venture Global maintains a close relationship with the White House, which may facilitate its access to the necessary permits for constructing new plants.
In April, Sabel attended a dinner at Mar-a-Lago with executives from the oil and gas sector, and the company contributed $1 million to Trump’s inauguration campaign in January 2025.
At the recent event, Chris Wright emphasized the importance of Venture Global's work, aligning it with President Trump's agenda.
However, analysts question whether the Virginia-based company can execute its ambitious goal of building five export terminals with a combined capacity exceeding 100 million metric tons of LNG annually, surpassing the total U.S. LNG exports from the previous year.
Andrew Glynn, managing director at research firm Enviros, stated that in light of the disappointing IPO, strained client relationships, and a significant downward revision of performance expectations for 2025, the company is likely to face substantial challenges in securing the $18 billion needed for the Hackberry LNG expansion.
A major obstacle for the firm is its ability to forge long-term supply contracts spanning 10 to 20 years to raise the tens of billions of dollars required for new plant constructions.
This difficulty is exacerbated by ongoing disputes with Shell, BP, and Repsol, which are not expected to be resolved until the fall.
In comments to financial media, Wael Sawan, CEO of Shell, highlighted that trust is fundamental in the industry, and any company failing to adhere to its contracts undermines the credibility and stability of the entire LNG sector.
Alongside its internal challenges, Venture Global confronts a more difficult economic and geopolitical landscape for LNG.
According to estimates from Rystad Energy, the market is projected to experience an oversupply by the mid-2030s, while JP Morgan predicts that rising production led by Qatar and North America will likely lead to long-term price declines.
Analysts suggest that any potential peace agreement between Russia and Ukraine could resume flow of cheap Russian gas via pipelines to Europe, potentially further dampening demand for U.S. LNG.
Spiro Donis, an analyst at Citigroup, noted risks associated with the currently strong LNG prices if Russian gas returns to the markets.
Specifically for Venture Global, while it possesses a portfolio of long-term contracts, it may be more vulnerable to fluctuations in spot markets compared to its competitors.
This event has been interpreted as a strong signal of a revived American prominence in the global energy arena.
During the ceremony held at the Hackberry facility on the Gulf Coast of Louisiana, Energy Secretary Chris Wright praised CEO Mike Sabel as a 'great visionary founder.' However, this celebration was contrasted by a significant sell-off of Venture Global’s shares, which plummeted 36% by the end of trading, following disappointing sales figures, export volumes, and profits that fell short of expectations.
Additionally, the company faced a surprising $1.3 billion increase in facility construction costs, all amid favorable conditions in the energy market.
This downturn marks a stark reversal for Venture Global, which had been preparing for an initial public offering (IPO) just two months prior that would have elevated its valuation above that of oil giant BP. The IPO's underwhelming results, litigation with key clients, and disappointing early financial results have led to substantial losses for investors and prompted serious doubts regarding the company's ability to execute its promised plans.
The company's market capitalization has dropped to just $23 billion, less than one-third of the $60 billion valuation achieved in a diminished IPO conducted on January 23. This figure is significantly lower than the initial target of $110 billion set by the company.
Shares have also fallen below their IPO price on the first day of trading and have yet to recover.
Joseph Schuster, founder of IPOs Schuster, characterized the company’s performance as 'the worst ever' relative to its size within the energy sector.
He indicated that the weak demand for the IPO raised 'warning signals,' suggesting that ongoing declines in stock price could fuel short-selling and hinder the firm's ability to raise additional funding through secondary offerings.
Venture Global, a major U.S. LNG supplier, is currently facing a class-action lawsuit alleging misleading information in its IPO registration statement.
The company has denied these allegations, asserting they lack legal basis.
In addition to this, it is embroiled in a $5 billion arbitration dispute with several clients, including Shell, BP, and Repsol, who accuse it of failing to deliver gas shipments as contracted and instead selling them on the spot market at higher prices following the onset of the war between Russia and Ukraine.
Venture Global has contended that its facilities were not yet operational at full capacity, justifying the sale of shipments on the spot market without breaching contracts, emphasizing its commitment to fulfilling contractual obligations.
Despite these significant challenges, co-founders Mike Sabel, a former investment banker, and Robert Pender, an attorney, continue to pursue ambitious growth plans for the company.
Venture Global maintains a close relationship with the White House, which may facilitate its access to the necessary permits for constructing new plants.
In April, Sabel attended a dinner at Mar-a-Lago with executives from the oil and gas sector, and the company contributed $1 million to Trump’s inauguration campaign in January 2025.
At the recent event, Chris Wright emphasized the importance of Venture Global's work, aligning it with President Trump's agenda.
However, analysts question whether the Virginia-based company can execute its ambitious goal of building five export terminals with a combined capacity exceeding 100 million metric tons of LNG annually, surpassing the total U.S. LNG exports from the previous year.
Andrew Glynn, managing director at research firm Enviros, stated that in light of the disappointing IPO, strained client relationships, and a significant downward revision of performance expectations for 2025, the company is likely to face substantial challenges in securing the $18 billion needed for the Hackberry LNG expansion.
A major obstacle for the firm is its ability to forge long-term supply contracts spanning 10 to 20 years to raise the tens of billions of dollars required for new plant constructions.
This difficulty is exacerbated by ongoing disputes with Shell, BP, and Repsol, which are not expected to be resolved until the fall.
In comments to financial media, Wael Sawan, CEO of Shell, highlighted that trust is fundamental in the industry, and any company failing to adhere to its contracts undermines the credibility and stability of the entire LNG sector.
Alongside its internal challenges, Venture Global confronts a more difficult economic and geopolitical landscape for LNG.
According to estimates from Rystad Energy, the market is projected to experience an oversupply by the mid-2030s, while JP Morgan predicts that rising production led by Qatar and North America will likely lead to long-term price declines.
Analysts suggest that any potential peace agreement between Russia and Ukraine could resume flow of cheap Russian gas via pipelines to Europe, potentially further dampening demand for U.S. LNG.
Spiro Donis, an analyst at Citigroup, noted risks associated with the currently strong LNG prices if Russian gas returns to the markets.
Specifically for Venture Global, while it possesses a portfolio of long-term contracts, it may be more vulnerable to fluctuations in spot markets compared to its competitors.
Translation:
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