New LNG plant to enhance Venture Global’s profits while meeting the needs of long-term customers

Venture Global Inc is on the brink of distributing liquefied natural gas (LNG) shipments from its new Louisiana export terminal to established clients rather than to the highest bidders globally. However, it intends to implement this strategy at a new, larger facility it is in the process of launching.

On April 15, Venture Global will finalize the commissioning of its Calcasieu Pass facility in Louisiana. This will usher in a new era for the company, obligating it to fulfill the contractual commitments it made while constructing the facility. Commissioning, the process of ensuring that a new plant’s systems are operating as intended, is a time-consuming procedure at many LNG plants. At Calcasieu Pass, it took three years to complete this process, enabling Venture Global to sell significant test cargoes to the highest bidders in the global market rather than fulfilling contracts with customers seeking lower prices.

Several industry giants including Shell, BP, Orlen, Edison, and Repsol have lodged arbitration claims against Venture Global, alleging deliberate delays in fulfilling supply contracts to capitalize on surging spot prices. Venture Global, however, asserted that technical issues with the power system delayed the plant’s normal operations.

As Calcasieu Pass nears completion of its commissioning, Venture Global’s Plaquemines LNG plant, a newer and larger facility, is increasing production levels for the lucrative spot market since it commenced production in mid-December. The company plans to commission the plant in phases over two years, a move analysts believe will strengthen its profitability outlook.

Energy analyst Adam Baker at Morningstar anticipates that the majority of Venture Global’s sales will be conducted on the spot market in 2025. Plaquemines is currently operating at 140% of its design capacity and has sold 29 cargoes within three months at an average liquefaction fee of $7.26 per million British thermal units (mmBtu), according to an SEC filing.

Poten and Partners’ business intelligence chief Jason Feer predicts that Venture Global’s overall revenue will increase from LNG sales at Plaquemines, with expectations to secure additional revenue from Calcasieu Pass. Investment bank UBS estimates that the company’s LNG revenues could double to $9.98 billion in 2025 from $4.972 billion in the previous year, with further growth expected through 2029 due to higher volumes and robust prices.

While Exxon Mobil, Chevron, and Orlen are contracted customers for LNG supply from the Plaquemines facility, they did not provide comments in response to requests. Industry leaders such as Shell are preparing for potential delays in receiving their LNG supplies following a long commissioning process. Venture Global, poised as the second-largest U.S. LNG exporter after Cheniere, has seen export sales surge as the U.S. solidified its position as the leading global supplier of LNG post-Russia’s invasion of Ukraine.