Venture Global, a major US developer of liquefied natural gas (LNG), has announced its intention to launch an initial public offering (IPO) aimed at harnessing investor interest as the country anticipates a surge in energy exports. This move comes as President-elect Donald Trump prepares to take office, potentially reshaping the energy landscape.
The company, which aims to construct and manage five LNG terminals along the Gulf Coast, submitted its IPO application to the US Securities and Exchange Commission last Friday. However, the specific size of the offering on the New York Stock Exchange remains undisclosed.
Reports indicate that Venture Global is looking to raise between $3 billion and $4 billion, positioning this IPO as the largest energy listing in over a decade, and one of the biggest in US history. Analysts at JPMorgan have valued the company at around $100 billion altogether, which includes significant debt incurred from developing its terminals.
Venture Global’s IPO plans coincide with expectations that LNG developers will benefit significantly from Trump’s policy changes designed to facilitate higher oil and gas production and exports, aiming for what he describes as “US energy dominance.”
Since its establishment 11 years ago, Venture Global has accumulated about $54 billion to finance its terminal construction and operational costs. The company has generated nearly $20 billion in gross revenues during this time, and long-term contracts are projected to yield revenues of $107 billion in the coming years.
Founded by former banker Mike Sabel and lawyer Robert Pender, who collectively own 84% of the company, they received compensation of $33.5 million and $28.5 million respectively in 2023.
However, Venture Global is facing challenges. The company is currently engaged in a legal dispute with major players like Shell and BP over allegations of breaching long-term contracts when LNG prices surged after Russia’s invasion of Ukraine. These disputes have led to arbitration claims amounting to at least $5 billion against the firm, with potential consequences of “substantial” liabilities and the cancellation of some contracts.
Additionally, former employees are pursuing a lawsuit against Venture Global for $214 million related to supposed violations of stock option agreements.
Having experienced rapid growth over the last decade, Venture Global is responding to increased global demand for US gas. Its first terminal, Calcasieu Pass, began operations in March 2022, coinciding with high gas prices linked to the geopolitical turmoil. A second facility, Plaquemines, commenced LNG production this month.
The company also has plans to expand its capacity to export up to 100 million tons per year, surpassing the total LNG output of certain nations. However, plans have been complicated by regulatory hurdles under the Biden administration. The third project, CP2, is still awaiting a crucial Department of Energy export license, a delay resulting from a permit freeze instituted back in January.
Recent reports suggest that unchecked expansion could lead to increased domestic fuel prices and hinder global climate objectives. In contrast, Trump has pledged to lift the moratorium on new projects and enhance US production capabilities, which currently stand as the world’s largest supplier at 11.4 billion cubic feet per day. Projects currently under construction are expected to ramp this figure up to 24.4 billion cubic feet daily by the end of 2028.